Credit card basics · Updated October 2026 · 5 min read
Most credit card fees come down to two charges: the joining fee you pay when you get the card, and the annual fee you pay every year after. Many cards waive one or both if you meet certain conditions. This guide explains how each works and how to tell whether a card is worth its fee.
In short: The joining fee is a one-time charge when you take the card. The annual fee is charged every year, and it is often waived if you spend a set amount. A card is worth it when the rewards and benefits you actually use are worth more than the fees, including GST.
What does annual fee waiver mean?
An annual fee waiver means the bank does not charge (or refunds) the yearly fee on your card, usually because you spent a set amount in the previous card year. For example, HDFC Millennia costs ₹1,000 + GST a year, but if you spend ₹1 lakh on it in a card year, the next year’s fee is waived. Some cards are lifetime free, which means there is no fee to waive at all.
The card year usually runs from the date your card was issued, not from January to December. Spends that do not earn rewards, such as fuel, rent or wallet loads, often do not count towards the waiver target either.
Joining fee vs annual fee
| Joining fee | Annual fee | |
|---|---|---|
| When you pay | Once, when the card is issued | Every year, usually on your card anniversary |
| What it covers | Issuing the card | Keeping the card and its benefits active |
| Can it be waived? | Sometimes, as a promotion | Often, if you reach a yearly spend target |
| Common in | Most paid cards | Most paid cards |
Fees are usually shown “plus GST”. GST is currently 18% on card fees, so a ₹500 + GST fee costs you about ₹590.
Annual charges of popular credit cards in India
Here is what some of the most popular cards cost each year, and how much you need to spend to get the annual fee waived.
| Card | Joining fee | Annual fee | Annual fee waived on yearly spend of |
|---|---|---|---|
| SBI Cashback | ₹999 | ₹999 | ₹2 lakh |
| HDFC Millennia | ₹1,000 | ₹1,000 | ₹1 lakh |
| SBI SimplyCLICK | ₹499 | ₹499 | ₹1 lakh |
| Swiggy Ornge HDFC | ₹500 | ₹500 | ₹1.5 lakh |
| Flipkart Axis Bank | ₹500 | ₹500 | ₹3.5 lakh |
| HSBC Live+ | ₹999 | ₹999 | ₹2 lakh |
| Tata Neu Infinity HDFC | ₹1,499 | ₹1,499 | ₹3 lakh |
| HDFC Regalia Gold | ₹2,500 | ₹2,500 | ₹4 lakh |
| Marriott Bonvoy HDFC | ₹3,000 | ₹3,000 | No waiver |
| Axis Bank Magnus | ₹12,500 | ₹12,500 | ₹25 lakh |
| Scapia | Free | Lifetime free | Not needed |
| IndusInd Tiger | Free | Lifetime free | Not needed |
Types of fee structure
- Lifetime free: No joining fee and no annual fee, ever. Good for beginners and for people who spend little.
- First year free: No joining fee in year one, but an annual fee after, which may be waived on a spend target.
- Fee with a spend waiver: You pay the fee, and the annual fee is waived each year if your spend reaches a set amount.
- Premium cards: Higher fees, often several thousand rupees, in return for lounge access, travel rewards and larger welcome benefits.
How fee waivers work
Many cards say something like “annual fee waived on ₹1,00,000 spend in a year”. This means the bank checks your total spends over the year after your card is issued. If you reach the target, you don’t pay the next annual fee.
Points to check
- Which spends count. Banks often exclude fuel, rent, wallet loads, insurance, government payments, and EMIs from the target. Read the exclusion list.
- The date range. It is usually counted from the card anniversary, not the calendar year.
- The timing. You normally need to hit the target before your next fee is billed.
- If you miss it. You are charged the full annual fee, and it is hard to get it back.
Is a card worth its fee?
Add up the value you would really get in a year, then subtract the fees.
Example (illustrative numbers): A card has a fee of ₹1,000 + GST, which is ₹1,180 a year. You spend ₹3,000 a month on categories where it gives 5% cashback. That is ₹150 a month, or ₹1,800 a year. After the ₹1,180 fee, you gain ₹620. If you only spend ₹1,000 a month in those categories, the cashback is ₹600 a year and you lose ₹580.
Always check the caps, because many cards limit monthly cashback or rewards. Don’t count benefits you will not use, such as lounge access if you rarely fly.
Questions to ask before choosing a card
- What are the joining fee, annual fee, and GST?
- Is there a spend target to waive the annual fee, and can I reach it with my usual spending?
- Which spends are excluded?
- What do I actually use: cashback, travel, fuel, shopping, lounges?
- What are the other charges, such as interest, late fees, and foreign currency markup?
Tips
- If you are new to credit or spend little, start with a lifetime free card.
- Don’t change your spending just to chase a waiver. Spending more to save a fee defeats the purpose.
- If you no longer use a card, ask the bank to close it before the next fee is billed. Under RBI rules, card closure requests must be handled promptly, and the bank can’t make you pay to close.
- If a fee is charged by mistake, contact the bank to ask for a reversal.
Common questions
What are credit card annual charges?
They are the fees a bank charges every year to keep your card open. Most cards in India charge ₹500 to ₹5,000 a year plus 18% GST, premium cards charge more, and lifetime free cards charge nothing.
What does annual fee waiver mean?
It means the bank does not charge the yearly fee, usually because you met a spend target in the previous card year, such as ₹1 lakh or ₹2 lakh.
When is the annual fee charged?
Usually on the statement after your card anniversary each year. If you met the waiver target, it is either not charged or reversed shortly after.
Is GST charged on credit card fees?
Yes. GST of 18% is added to joining fees, annual fees and most other card charges, so a ₹500 fee costs you ₹590.
Is a joining fee refundable?
Usually not. Some banks give the value back as a welcome voucher or reward points instead, or refund it if you spend a set amount in the first few months. Check the card’s terms.
Does “waived on ₹1 lakh” include all my spending?
Not always. Most banks leave out categories such as fuel, rent and wallet loads when counting towards the target.
Can I ask the bank to waive my annual fee?
You can ask. Banks sometimes reverse the fee for customers who use the card regularly and pay on time, but they do not have to.
Is a lifetime free card always better?
Not always. It costs nothing to keep, but a paid card can give more value if you spend enough in its reward categories. Compare the value you get after fees.
Do fees affect my credit score?
Not directly. But unpaid fees add to your balance, and if you do not pay your bill on time, your score can drop.
Compare fees side by side: See credit cards with their joining fees, annual fees and waiver targets. Next in this series: cashback vs reward points.
Cards with no fee or an easy fee waiver
If you want to avoid fees altogether, start with these:
- IDFC FIRST Classic, HSBC Platinum and Scapia: lifetime free, with no joining or annual fee.
- HDFC Pixel Go and HDFC Indian Oil: small fees, waived when you spend ₹50,000 in a year.
- SBI SimplyCLICK: ₹499 fee, waived on ₹1 lakh spend a year.
See all 101 cards with fees and eligibility on our credit cards page, or get a personal pick from the Card Finder.
Disclaimer: This guide is for education and is not financial advice. Fees, rates and benefits differ by card and change often, so check your card’s current terms. Some links on Koshfin are affiliate links; we may earn a commission at no extra cost to you.