There are plenty of credit cards to choose from in the credit card market. A no annual fee credit card is one of those cards that might look like a catch if you are looking for a credit card. However, if you do not read the fine print you could end up with a card that is not good for you. Here is what you need to know when it comes to the pros and cons of a no annual fee credit card.
What is a no annual fees credit card?
A no annual fees credit card is a card that does not charge an annual fee. Most credit cards come with an annual fee that can range from $25-$500. Your annual fee can also be affected by the type of features that you add to your card. This type of card can come in handy if handle responsibly. It is vital that you read the fine print to see if it will work out for the type of spender you are.
The benefits of a no annual fees card
A no annual fees credit card is designed for people who are smart spenders. This means that you use your card a lot, in a structured manner, to take care of your expenses but you are also looking for something that is economical to suit your needs. If you are a person who pays off your debt on time before the interest free period kicks in and you structure your spending for convenience, then this could be the card for you. It can also help you save in the process.
The pitfalls of a no annual fees card
This is a type of card that works according to the type of spender you are. If you are a sensible spender who plans to use the card to take care of emergencies, then it can be of great use, but for people who constantly use the card to take care of expenses that are not deemed emergencies you could find yourself in trouble. A no annual fees credit card can come with a higher interest rate due to the lack of fees. It can also come with an interest-free period that you need to be aware of to avoid paying more in interest. It can also have a limited range of reward program incentives.
Read the fine print and compare
To make the card work for you instead of the other way around it is important that you read the small print and compare your options. It is possible to find a lender that is willing to waive the annual fees for the life of your card, but you will have to weigh the implications of this decisions and whether it will suit you financially. If you are planning to use such a card for a limited period, then it will be in your best interest to see how you can use the introductory period to benefit you before it expires.