Who qualifies for the No annual fee scheme? - Other Questions


Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most 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. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Questions » User Questions » Other » Who qualifies for the No annual fee scheme?

Who qualifies for the No annual fee scheme?

Answered on

Credit card companies offer the no annual fee scheme as part of its various customer friendly services. The annual fee is an amount that is levied on users of the credit card, for the services provided to them. The annual fee is an additional charge and not all credit card companies levy them. In most cases, credit card companies do not charge long term customers an annual fee. The annual fee is mostly added to the tabs of those who do not show the intent of staying with that particular company for extended period of time.

There are a few common reasons why credit card users chose to change credit cards companies frequently. The most common of these reasons id balance transfers. Some companies include a grace period to encourage credit card users to join their company. During this grace period, the interest rate is further lowered. What some astute users chose to do is to move from one credit card Company to the next, only staying fro the duration of the grace period. The interest debt is considerable lowered through this constant shifting. However, the catch is that companies will impose an introductory fee on new customers, failing which, an annual fee will be charged. In this way, the company manages to make some money off each customer who joins the company.

Long term customers are most beneficial to a company, as the interest tabulated during their stay will be higher than the interest the companies garner from short term customers. Short term customers can be seen as fringe benefits for the company. The recent economical meltdown has resulted in all credit card companies vying for the attention of fresh customers. Furthermore, the existing customers have to be coaxed into using their credit cards.

Due to the rate of unemployment in the country, the incidence of fringe purchasing saw a decline. Credit card companies have to now devise ways to get their users back into shopping mode. In fact, most of the recently introduced offers and rewards are mainly aimed at achieving this end. The no annual fee is one such. By claiming to not charge an annual fee, credit card companies are hoping to attract short term customers, as short term customers are the most likely ones to entertain ideas of shifting companies. Most Credit card companies never charge their long term customers an annual fee anyway.

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.
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
Excellent, Good Credit
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.
Excellent, Good Credit
0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the variable APR will be 15.74% - 25.74% based on your creditworthiness*
Excellent, Good Credit

Other Questions in

You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!