Annual fee refers to a fee paid to the lender or credit provider for providing credit service. The credit card companies in particular levy annual fee each year. They charge indicating the right to possess and use the card. This will be included in the bill or customer’s monthly statement. This fee is much applicable to other open-end credits like credit cards such as home equity lines of credit etc .
If a fee for the credit is charged for one year or if the credit cost is expressed as yearly rate, then it is called Annual Percentage Rate (APR). It is the simple interest rate along with other finance charges.