The pro's and cons of having a no annual fees credit card

Posted on Tuesday, May 8, 2018 - 14:44

Looking for a credit card that comes with the best features suited towards your spending needs but trying to avoid accumulating a hefty annual fee then you might want to consider a no annual fees credit card. A no annual fees credit card could potentially save you hundreds of dollars, but is it really worth having in your wallet? Here are a few things you need to consider.

What is a no annual fees credit card?

Most credit cards usually charge an annual fee to cover the various features that come with a credit card. The higher end the features are the more likely you are to fork out in annual fees. The average credit card annual fees usually range from as little as $50 - $500. A no annual fees credit card means that you pay $0 in credit card annual fees.

Will I pay no fees whatsoever for the duration of the card?

No annual fees credit cards can easy your finances without the annual fee that increases p.a. However, you should read the fine print that comes with the card as not all no annual fees credit are created equal. Some cards will charge you $0 for the period in which you have the card, but other cards may require that you spend a certain amount or have a limited period in which the $0 annual fee is applicable.

Can I still get the perks of features with a no annual fees?

As you already know annual fees are there to pay off features that come with a credit card such as; complimentary travel insurance, concierge service, price protection, and airport lounge access features. With a no annual fee credit card you still get these features and reward programs, but once again not all credit cards in these group are created equal. This is where you need to compare your credit card to find one that has the best features with the sweet promise of a no annual fee.

What are the cons that come with the card?

It is important that you check if everything about the credit card aligns with your financial needs. This means reading the fine print, features, and interest rate.

  • The cons of owning this card mean that you are most likely to pay a high interest rate.
  • If you fail to pay off the balance in full that is owed on the card each month the benefit of not paying an annual fee gets cancelled.
  • There is also a promotional period on some credit cards, and some require that you meet criteria before unlocking the perks of paying no annual fee.

Things that you can do that will make you attract fees

Although a no annual fees credit card promises no annual fees payment there are things that you could do that could attract fees that you don’t want to see added to your monthly balance.

  • Late payment fee can be charged to you if you pay off your credit card late.
  • Paper statement fee will be charged to you if you choose a paper statement over an online statement. However, this depends on which lender you have taken the card from.
  • Cash advance interest for money that is withdrawn from an ATM can be charged interest on the amount you have taken out.
  • Foreign transaction fees can be charged to your card if you decide to use it overseas. If you are looking for a card that will not attract hefty fees from foreign transactions its best to get a 0% foreign transaction credit card.
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