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      February 17, 2019

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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.

Best Low Interest Credit Cards

This card offers one of the biggest cash sign-up bonuses we've come across for a no-annual-fee credit card, along with the versatility of unlimited 1.5% cash back. One of the few remaining balance-tra...

Published:  Sat, 16 Feb 2019 04:46:00 GMT



5 credit cards that offer free credit scores - and lucrative rewards

Here are our favorite credit cards with no annual fee that give you free access to your credit score. CreditWise credit monitoring $150 cash bonus when you spend $500 in the first three months Earn 1. ...

Published:  Tue, 12 Feb 2019 14:34:00 GMT



Credit Card Merchant Fee Hikes Could Mean Higher Prices for Everyone

That means no matter how consumers pay-credit card, check, or cash-they still are charged for the fee hikes ... Visa's 2018 annual report shows revenue of $20.6 billion and net income ...

Published:  Fri, 15 Feb 2019 13:33:00 GMT



Top Gas Rewards Credit Cards in 2019

Low Interest Credit Cards 0% Intro Rate Credit Cards Balance Transfer Credit Cards No Annual Fee Credit Cards No Foreign Transaction Fee Cards Rewards are one of the most requested features in credit ...

Published:  Thu, 14 Feb 2019 08:06:00 GMT



9 reasons you shouldn't automatically ignore a credit card just because it has an annual fee

Credit cards that offer huge welcome bonuses - think 50,000-100,000 points or more just for signing up and meeting a minimum spending requirement - are pretty much guaranteed to have an annual fee. Th...

Published:  Mon, 11 Feb 2019 08:54:00 GMT



Marriott is offering a 100,000-point welcome bonus for its new luxury credit card - which could help justify the $450 annual fee

Different-tiered Marriott cards offer free nights with a lower certificate value. Perks and benefits of the Bonvoy Brilliant AmEx The awards rate on this card alone may not justify a $450 annual fee. ...

Published:  Wed, 13 Feb 2019 10:06:37 GMT



The Pros And Cons Of Credit Cards

Today, there's no shortage of options available ... for using them regularly. If you use a credit card for routine expenses, these rewards can add up quickly. Though many rewards cards come with annua...

Published:  Fri, 15 Feb 2019 07:06:00 GMT



The Cheapskate's Guide to Maxing Out Credit Card Rewards

No way. Instead ... This is not an asset that appreciates in value." Many credit cards will only honor your points for as long as your account is open. So if you're hoping to avoid paying the annual f...

Published:  Thu, 14 Feb 2019 01:16:00 GMT



No annual fee credit cards

If you are after a new credit card or looking to switch cards you might be wondering why you'd opt for a card that charges fees over one that doesn't If only the credit card world was that simple. Lu...

Published:  Thu, 06 Sep 2018 17:31:00 GMT



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