A No Annual Fee Credit Card

Everyone has seen this elusive line many times over when they are shopping around for a credit card. But, what most people don’t know is that these cards are usually only for those with excellent credit, and not for people who have good, OK, or poor credit. Yet, for consumers who have established credit, few types of credit cards are more rewarding than a no annual fee card. These cards offer most of the same perks of other credit cards with the exception to the annual fees charged by some banks for issuing a card and managing a card account.

A no annual fee credit card is just that – a credit card that does not charge you a yearly fee to keep their card in your wallet. So what are these annual fees and how do they come up with what fee they will charge you?

Well, an annual fee is something that the bank or credit card company will charge you each year, usually on the anniversary of the month you signed up for the card, to keep your account open and in good standing with their company. These annual fees are usually figured one of two ways: they are either a set amount for each and every card or they are based on a percentage of the average balance that you carry throughout the year. So, you either know what your fee will be each year or you can get blindsided with the annual fee if you don’t keep on top of your balance with that certain card.

What’s mean no annual fee?

So, when people hear about a “no annual fee” credit card, they usually flock to the company to try and get one for themselves. Yet, it’s usually only those people with excellent credit who actually get this great deal. Those with less than perfect credit usually get their fee for the first year waived or something along those lines. You should make sure when you are signing up for a no annual fee credit card that you know if you have actually gotten this great deal or not.

A no annual fee credit card is great for those who are accepted for one. But, there is usually a catch somewhere in the mix. You should read all the fine print on your credit card application so you are in the know about any miscellaneous fees or penalties that can apply or any other restrictions on the card or your spending limit. This way, you are fully aware of all the dips and turns before you sign up and start spending your money. It will also keep you from getting blindsided with outrageous fees or penalties that can end up ruining your credit score.

So, before you jump on board with a credit card company who is offering a no annual fee credit card, you should make sure that you know everything about the card and the terms before you sign up the contract and take the card.

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Mark Jean