The bulk of lending institutions now offer no annual fee credit cards to draw in new consumers. Picking a card with no annual fee can save you a great deal of money. Don't jump at the first offer you receive though. Picking the right card can be an arduous task and understanding what kind of contract you are commiting to is important.
Tips for Picking the Right No Annual Fee Credit Card Everything you need to know about a particular credit card and its policies can be found either on their website or in the pamphlet included with your card. As a responsible card-holder, you need to understand the terms you consent to.
Read the fine print every time. Though the information regarding your card's account terms may sound like boring copy or legal talk, it is important to read through it. The legal talk usually includes the crucial elements about your credit agreement, including additional fees you may otherwise not be aware of.
Credit card companies also update these policies now and then and send the new copy with your bill. Take the time to read about the changes in the agreement to avoid incurring additional fees.
Understand that over time the interest rate of your no annual fee credit card may increase by 10% or more. Introductory rates look good and work well to draw new in clients. Understand that this most likely means there will be a significant increase in the interest rate in the future.
Make sure you comprehend the policy on late fees. Some institutions charge as much as $39 for a late fee, which makes up for them not charging an annual fee. Many cards also have a policy that the low interest rate remains the same as long as payments are made on time. Late payments may result in an instant increase in your interest rate. Learn the institution's policy on over-the-limit fees; they can get out of control if left unrestricted. A late fee could be all it takes to put you over your credit limit and without making a purchase you could owe an additional $80 or more to bring your credit card current.
Take care to see if the institution offers any type of benefit like vacation miles, merchandise perks, extended warranties on goods, balance transfers, gas rewards or a cash back reward system for using the card.
Great No Annual Fee Cards All cards have different agreements. Carefully look over all of your options to find which one would work best for your financial situation and spending style. The right no annual fee credit card can help save money.
Chase Bank offers a Platinum Business Card that has an introductory APR of 0% with no annual fee and the rate is only 12.24%.
The Discover Business Card offers a 13.99% APR, no annual fee and cash back rewards.
Citi Bank offers the CitiBusiness Card that has a low rate of 10.74%, no annual fee, merchandise discounts and a 0% introductory offer.
The American Express Simply Cash Business Card offers no annual fee, unlimited cash back for purchases made with the card, a 0% introductory rate and a very low 8.25% APR.
If you have taken a look or even a glance at all the credit card advertisements in the newspaper, magazines, unsolicited emails or even bulk postal mails, you will probably notice a common trend. More and more of them are stating that their credit cards do not carry any annual fee. This certainly looks like good news to all of us.
But are there any real benefits to owning a no annual fee credit card?
First of all, you need to understand that the bulk of the revenue from credit card companies come from the finance charges and annual fees associated with the card. If you do not pay off your credit card balance in full, you will need to pay interest. On top of that, if you exceed your card limit or do not make your monthly payment on time, you are slapped with an extra finance charge. And if you withdraw cash from your card, you also need to pay some form of surcharge. These are just a few common ways that credit card companies make money from you.
For credit cards that do not carry annual fee, the interest rate associated with them is likely to be higher than those with an annual fee. This makes sense, as the card companies want to offset their revenue loss from the annual fee by charging a higher interest rate. In fact, the gain from the higher interest rate can even be more lucrative than the annual fee alone.
However, there are still some benefits to owning such a card. If you are one of the minority of people who pay off the entire outstanding balance in full each month, a no annual fee credit card is actually going to do you a lot of good. There is no need to pay any additional fee to the card companies or go through the trouble of asking for a waiver of the fee at the end of the year. You can use the extra money for other purpose.
This type of card can also benefit those who carry very little outstanding balance. Typically, if you roll over less than fifty dollars each month, you can still gain some benefits from such a card. The interest you pay is likely to be less than the annual fee. However, you have to do some calculation here based on an analysis of your spending habits. Make sure that the total interest you will be paying in a year is less than the annual fee of similar card.
For those people who like to roll over large amount of balance to the following month, it probably makes more sense to a use a low interest rate credit card. As interest is compounded every day, the saving gained from not paying annual fee will be eliminated in a very short period of time if your card comes with no annual fee but high interest rate.
Ultimately, you have to understand your own money management style in order to determine if a no annual fee credit card is for you. It is great not to pay annual fee but if you are unable to manage your money well, the little saving from not paying annual fee is not going to help you.
Both Nick Bair & Stephen Chua are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Nick Bair has sinced written about articles on various topics from Credit Cards. Nick Bair is a consumer advocate and the webmaster of , a credit card comparison site. Nick wishes to alert the buying public about their choic. Nick Bair's top article generates over 40500 views. to your Favourites.
Stephen Chua has sinced written about articles on various topics from Free Credit Report Score, Credit Cards and Mortgage. Stephen Chua is the founder of FindCreditCardsInfo.com,where you can find more information on and. Stephen Chua's top article generates over 60500 views. to your Favourites.