Credit card annual fees seem to be gate keepers on both sides of the financial spectrum. There are the miles cards and premium cards that are essentially charging a fee for the service they provide you - converting your spending to miles, points or access to events and services.

On the other side of the spectrum, cards for people building credit or those who already have bad credit may charge a fee as a barrier to entry as well as an application fee.

So it depends on what you are looking for in a credit card.

I agree with Ari, who nicely describes the current situation.

Annual fees for plain-vanilla credit cards used to be much more common. With no many no-fee cards gaining popularity some years ago, card issuers realized that they needed to offer differentiators to be able to charge fees. As Ari says, extra perks and availability to those with damaged credit are the key differentiators.