How does a no annual fee credit card function? - Other Questions


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How does a no annual fee credit card function?

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A large number of credit cards come with no annual fees. It does somehow make sense. Why should one pay an annual fee to use the card`s facility, when the card company is already earning revenue from the customer using the card? No annual fee credit cards are very popular, and the card industry uses this to the maximum to create a larger customer base. But one must check to see, what the card company will get in return. These cards typically have a higher rate of interest than the other cards with annual fees.

The annual fee is the membership fee that companies charge for using their products or the right to use their cards. This fee is charged irrespective of whether one uses the card or not. The annual fee can range between $25 to $100 and more. The first company to waive their annual fee was AT&T, when they entered the credit card industry, in order to increase the visibility of their “no annual fee credit card”. This is where the other card issuers took a hit. All credit card companies woke up to this new scheme of things, and followed AT&T, and this is something that bankers termed as “the big scare”.

Before choosing an airline credit card that carries no annual fee, one must double check, if there is a “no fee” clause associated with the card. Sometimes the customers might be misguided to this no annual fee waiver, which would only be applicable to the first year. These can be very tricky issues and one must be very cautious and not fall into these clever traps. Even while applying for an airline credit card, it is best to check the credit rating of the card.

It is essential to keep up to date on all these products, which will provide adequate information in order to make the right decisions about the products that are suitable for both personal, as well as for business. A bit of research might be required on one`s part, but it would be worthwhile in the long run, as it will help save a lot of money.

There are a large number of cards that carry no annual fees, and with a little bit of research it is easy to find the right card. Shop online and find the card that best suits you.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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