Credit Cards With No Annual Fee – What You Must Know

February 10th, 2011

In the rush to save as much money as possible on their credit card bills, consumers often leap at the first credit card deal that looks as though it has a feature that will save them money.

However, if they have not done their research correctly, the money they save on one feature can easily be lost if the other fees or charges associated with the card do not fit their spending style.

The No Annual Fee Credit Card

No annual fee credit cards do exactly as they say on the tin. You do not have to pay the usual yearly charge other cards demand, and in the case of some of the more premium credit cards, the saving can run into 3 figures sums each year.

However, there are other things you need to take into account before you can decide whether a no annual fee card is the best for you.

Interest rates
It isn’t unusual to find that the interest rates with no annual fee credit cards can be a little higher than other cards. It isn’t always the case, but should be looked at because any unpaid balance on your account at the end of the month will face this interest charge. The higher the rate, the more you will pay.

How long is the deal?
Some credit card providers run no annual fee credit card deals that only last for a set period of time; normally for the first year.

If you are looking for a card that remains fee free then you need to check this in the terms before you sign the contract.

What are the charges?
Sometimes credit card companies will try and offset any losses they incur when offering promotions by inflating other fees and charges associated with the account. Be sure you understand exactly what you are expected to pay on the card, so you are not caught out by any surprise transaction or admin fees.

Be Sure No Annual Fee Cards Are Best For You

In reality, the main type of consumer that is going to get the most from a no annual fee credit card is one that only really uses their credit card every now and then. If you only ever use your card in emergencies then you will benefit from not having to pay to have the card just sitting in a draw.

If, however, you are a regular credit card user then you may benefit more from other promotional features that often come as part of card deals, such as balance transfer offers or low interest rate deals.

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	Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)
HSBC Credit Card	17.99%	0% for 8 months with 2% handling fee	$0	21.99%
Virgin No Annual Fee Credit Card	18.99%	2.9% for 6 months	$0	20.99%
Bankwest Zero MasterCard	0% for 6 months (reverts to 17.99% )	4.99% for 9 months	$0	18.99%