What are no annual fees cards and how to obtain one? - Other Questions


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What are no annual fees cards and how to obtain one?

Answered on | Updated on August 26th, 2010
The content is accurate at the time of publication and is subject to change.

Credit cards that do not charge an annual fee for membership are called no annual fee cards. Usually premium credit cards like gold and platinum visa and master cards or world credit cards come with a high annual fee, if you want to sign up for a membership. Generally, the greater the reward program on your credit card, the higher fees you will be charged. Reward programs like air miles and hotel stays will have higher membership fees and programs like cash backs and point systems cost you less. The whole idea of having these rewards and paying a high fee for it does not make sense because it doesn`t give you the profit you are looking for in the card. The best credit cards are the ones that offer these reward programs and do it for free of cost.

Another important part of annual fee is that the amount you pay to get a credit card depends a lot on your credit score. If your credit score is anywhere above 650 then you are in the low credit risk zone, that is, you are considered to be a safe investment. If your credit score is lesser than that, then you will have to pay a relatively high annual fee because according to the credit card companies they will be running the risk of providing you the credit. So if you have a low credit score when you get a credit card, it is okay if you have to pay the initial annual fee, you can use the card to improve your credit score. Once you come to the safety zone, you can then negotiate a with your credit card company to cancel your annual fee.

If you consider paying an annual fee as worthless, then another option for you to consider is the debit card facility available through your bank. These cards usually do not have annual fee of any sort and they give you the same flexibility of a credit card. Only difference is you will not be getting a credit, but will be able to only use the amount in your account.

Nowadays though, almost all basic or standard credit cards are offered for no annual fee, which will definitely help people with bad credit to improve their scores. Basic cards just work fine, for starters and once you get used to credit cards, you can qualify for reward programs from your credit card companies.

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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