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

Advertising Disclosure is an independent, advertising-supported web site. receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Questions » User Questions » Other » How does a no annual fee credit card function?

How does a no annual fee credit card function?

Answered on
Add to Favorites:

Tags: , ,

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.

All credit cards terms, fees and rates mentioned in this article/post are actual on the posting date. See the current products’ Terms & Conditions on the issuing banks' websites.
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the cash back earned at the end of your first year, automatically.
For Excellent, Good Credit
Our application is quick and easy with instant pre-qualification available
For Fair / Good Credit

Other Questions in