Credit Card Question & Answer

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Should I consider a credit card that offers no annual charge?

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With the competition between credit card companies and banks increasing everyday, market research teams are working around the clock to come up with schemes to attract new customers and hold on to the existing ones. The offers and schemes offered by credit card companies are usually markers of the current financial trends. When the recession hit, most people stopped excessive shopping and expenditure. With the wave of unemployment in the country, needless shopping took a backseat. The credit card sector was one of the worst hit during the financial breakdown. The credit card companies formulated various schemes in order to win back their spending customers.

While credit card companies and banks always had offers and schemes for their customers, they were never implemented to this scale. The no annual charge is one such offer. As per the dictates of this offer, the customer is granted services without an annual charge. This offer can either come as an introductory offer or as a more permanent one. The introductory offer of no annual charge is aimed at attracting new customers. For a newly joining customer, the no annual charge offer is applicable for the stipulated time period. Even if the offer is a temporary one, it makes a considerable difference to the total amount that is paid as additional charges and interest.

It is important to note that a credit card company offering several such offers and schemes may not be providing the lowest interest rates in the market. A low interest rate may be the only point to consider for those who have a rapidly increasing debt that is largely constituted by interest. For such individuals, the side offers may be helpful but not at the cost of a higher interest rate. Analyzing one`s use of the credit card will certainly be helpful in deciding which offer is best suited to one`s needs. For those who do have a large accumulated sum of interest to pay back, offers and rewards may be deciding factors in choosing one credit card over the other. These offers do cut back a considerable sum of money when added up.

The no annual charge is a helpful offer to avail of. These offers are rarely stand-alone. They always come affixed to other schemes and cut backs. The no-annual charge scheme, for example, must be assessed in connection with the other offers provided by the same credit card company.

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