Two different ideas
An annual fee is a charge for having the card each year. A security deposit is money you provide up front that the issuer holds as security for the credit line. The FTC lists annual fees among common credit card fees, alongside setup, monthly maintenance, cash advance, balance transfer, over-limit and late fees.
A deposit is not described as a fee in those sources, but it is still a cost of a different kind: while it is held, you cannot use that money for anything else.
Do not assume the deposit comes back automatically
Whether, when and how a deposit is returned depends on the card agreement. Look for what happens if you close the account, if you move to another card from the same issuer, or if the account is past due. If the agreement is unclear, ask the issuer before you apply.
Where to find the real numbers
The FTC points to the card agreement posted on the issuer’s website for information on interest and costs. The CFPB keeps a searchable database of card agreements, and notes that issuers are generally required to post their agreements on their websites with limited exceptions. The CFPB’s key terms page explains the vocabulary, including APR and cardholder agreement.
Compare over the time you will hold the card
Add up fees across the period you expect to keep the card, then separately note how much money would be tied up in a deposit. Interest is a third piece: if you carry a balance, interest applies whichever card you pick, so the payoff calculator can help you see what a balance costs.
Hypothetical example
These figures are invented for illustration. Card A asks for a $200 deposit and has no annual fee. Card B asks for no deposit and has a $39 annual fee. If you keep either card for two years, Card B’s annual fees would add up to $78. With Card A, $200 is set aside during that time, and the agreement would say what happens to it afterward.
Neither card is better in general. The comparison only becomes meaningful with the real terms, which is why the agreement is the document to read.
What to write down for each card
- Annual fee amount and any conditions.
- Deposit amount, where it is held, and the return conditions.
- Other fees: monthly, setup, late, cash advance, balance transfer.
- APR and when it applies.
- The link to the official agreement and the date you read it.
Sources
- FTC: Comparing Credit, Charge, Secured Credit, Debit, or Prepaid Cards (opens in a new tab)
- CFPB: Credit cards key terms (opens in a new tab)
- CFPB: Credit card agreement database (opens in a new tab)
Sources checked October 13, 2026.