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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

 

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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.

Is an Annual Credit Card Fee Worth It

And that certainly makes sense. But before you dismiss the idea of paying an annual fee, consider the benefits of doing so. For one thing, credit cards with no annual fee often come with stingier rewards programs than those that do charge fees. For example ...

Published:  Fri, 08 Dec 2017 21:42:00 GMT



Spending: Airline credit cards without the usual annual fee

By contrast, Delta's Gold Delta SkyMiles card ($95 annual fee) pays out only one mile per dollar ... Even if your preferred carrier doesn't advertise a no-fee credit card, you may be able to bypass the fee. "It never hurts to ask if there's a no-fee ...

Published:  Fri, 15 Dec 2017 02:36:00 GMT



Best Credit Cards For Everyday Use

The best credit cards for everyday use will vary from one person to the ... There is also a version of this card with lower rewards, but no annual fee. You can get details on this card here. The Discover it card is one that requires you to manage rotating ...

Published:  Fri, 15 Dec 2017 00:27:00 GMT



The Best Secured Credit Cards of 2017

... credit bureaus to help you get your credit back on track. Discover it® Secured Card - Discover makes the top of our list for a variety of reasons. First, the Discover it Secured Card charges no annual fee. Second, it offers a 2% cash back rewards ...

Published:  Thu, 14 Dec 2017 00:00:00 GMT



Why Your Awesome Rewards Credit Card Actually Kind Of Sucks

"There's no good reason to play with snakes," he told HuffPost. "They bite." Accruing miles is one of the top reasons people give for holding on to their credit card. There are a few catches, though, including the annual fees on most airline card

Published:  Thu, 14 Dec 2017 01:45:00 GMT



How to Use Overdraft Lines of Credit to Lower Fees

Additionally, while credit cards don't charge interest until after the payment ... Radius Bank's popular Hybrid Account offers this line of credit with no application fee, annual fee, or transaction fee to use the service. That makes it a great choice ...

Published:  Mon, 11 Dec 2017 00:00:00 GMT



5 Signs of a Bad Credit Card

There's an annual fee. If a credit card comes with an annual fee ... out ones that keep these sorts of transactions affordable. Voyage FCU's credit card keeps it simple-no fee charged for balance transfers. It has a late-payment rate.

Published:  Sun, 10 Dec 2017 22:10:00 GMT



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