October 19, 2017

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Credit Card Fees

The No Annual Fee Credit Card Advantage

When a No Annual Fee Credit Card Doesn't Save You Money


Top Consumer Reviews Articles provides unique articles that you won't find anywhere else on the internet. These articles are designed to help you make the most informed decisions possible.

When a No Annual Fee Credit Card Doesn’t Save you Money

When the government placed heavy restrictions on credit card policies in 2009, an effort to better protect the consumer financially, credit card companies had to become more creative in making their money. The days of double fees, underage clients, and unfair interest rate increases were over for them. But, new, less obvious methods of making back that lost revenue evolved.

Today there are a number of reasons why a credit card company will not charge an annual fee but most often it's used to draw in a customer. Annual fees are often waved for the first year or longer and credit card companies make every effort to make that back as quickly as possible. Below are several ways credit card companies work to draw you in and then make money off your business:

  • Interest rates. Most no annual fee credit cards have at least a slightly or significantly higher interest rates. This is one common method of earning back the cost of the waived annual fee. This is fine for those that never carry a balance and feel confident enough they will never have to. However, if you do tend to hold a balance from month-to-month you'll want to closely consider the annual interest rate and how much it will cost you to maintain your balance over time. If your balance is so large that the interest you accrue over the course of a year would be larger than the annual fee, you might want to opt for a card that will save you over all.
  • New Fees. Consumers should be on the lookout for additional fees not legally restricted by the Credit Card act of 2009. Perhaps all of them have not yet been identified but activation and application fees are some that we can think of. Reading the fine print of your credit card agreement will probably either give you a headache or put you to sleep but it's important in identifying any fees that you will be charged.
  • No annual fee offers might not last. Some no annual fee credit cards wave the fee only in that first year. When consumers are quick to avoid reading the fine print they are often shocked, the next year, when a hefty, say, $200 annual fee hits their account unexpectedly. This is a clear example of when a waived annual fee is not a good option.
  • Enticing offers. All of us like to receive something that feels free. No annual fees, cash back and reward credit cards are all very enticing. When a consumer chooses a no annual fee card with rewards programs, that encourage them to spend more than they can afford or quickly pay off, then the credit card is not a good savings opportunity.

Any time you're opening a new credit card account, you should look at several offers and do the math on which one is the best for your spending needs. If you plan on maintaining a bigger balance you may save money with a credit card that charges a small annual fee but offers a lower fixed interest rate.

You're Still Paying Credit Card Fees Even If You Use Cash

There are no annual fees, no finance charges, no potential for missing a payment, and no chance of paying interest -- all common fees associated with credit cards. But paying in cash doesn't let you escape from the impact that card fees have on the prices ...

Published:  Sun, 15 Oct 2017 19:22:00 GMT

Credit stress: 5 ways to negotiate with your credit card company

Are your cash back rewards and other benefits outweighing the annual fee If your answer is no, then it's possible you are holding a card that isn't the right fit for you anymore. While it's not recommended that you close your credit card account ...

Published:  Tue, 17 Oct 2017 10:00:00 GMT

Best Airline Miles Credit Cards

The United TravelBank Card is a no-fee airline rewards card that earns cash back ... the amount of bonus points you receive each card anniversary and the annual fee. With the Plus credit card ($69 annual fee), you will receive 3,000 annual bonus points ...

Published:  Mon, 16 Oct 2017 19:31:00 GMT

New Card Alert! Earn 3% Back on Dining, 2% on Groceries With No Annual Fee!

because these issuers only pull from one credit bureau. Plus, you'll earn unlimited 3% cash back on dining, 2% back on groceries, and 1% back on everything else. So if you spend a lot on food and are looking for a card with no annual fee and a simple ...

Published:  Tue, 17 Oct 2017 01:00:00 GMT

Shop for Credit Cards: The Best Online Deals in 2017

The BankAmericard® Credit Card is one of our favorites in the 0% intro APR category, offering a lengthy 0% intro APR on purchases and balance transfers for 15 billing cycles with no annual fee. Importantly, the card also waives balance transfer fees when ...

Published:  Fri, 13 Oct 2017 03:00:00 GMT

Blue from American Express Credit Card

Another advantage of this card is that there are no annual fees. So you can park this card in your wallet to establish credit without paying for it. Additionally, you don't have to have a great credit score to qualify for this card. So for people who are ...

Published:  Mon, 16 Oct 2017 01:00:00 GMT

How the Bank of America Premium Rewards Card Stacks up Against Low- and No-Fee Cards

... overview table that compares the Premium Rewards Card to other popular and rewarding cards with low (or no) annual fee: Bank of America Premium Rewards Credit Card 50,000 points after you spend $3,000 in the first 90 days 2x points on travel/dining ...

Published:  Thu, 12 Oct 2017 22:39:00 GMT

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