Exploring Credit Cards With No Annual Fees
With a credit card, consumers have the ability to borrow money to make purchases. This convenience can come at a price though. Credit card companies have a host of fees they levy on consumers, but some don’t assess annual fees for the use of their credit cards.
Overview of Credit Cards
A credit card provides you with a line of credit you can use for almost any type of purchase. Each month, consumers get a statement showing all charges made with the credit card for the preceding payment period. Paying this balance in full within the stated grace period will eliminate any interest charges. However, leaving an unpaid balance at the end of the grace period will lead to interest charges being added to the credit card balance. Interest rates charged by credit card companies tend to be high.
When used responsibly, credit cards offer both convenience and safety for purchases. Consumers don’t need to carry cash to buy things, which has many advantages.
Annual Credit Card Fees
Annual fees vary, but they could be $500 or more. A credit card that offers many services or perks might have a high annual fee, but some consumers consider this a worthwhile expense in exchange for the services. Consumers with less-than-stellar credit may be forced to choose a credit card with high annual fees as they rebuild their credit.
No-Fee Credit Cards
Some credit card companies offer introductory accounts that will waive annual fees for the first year. Subsequent years will involve fees, though, so it’s important to know what these annual fees will be before you commit to a credit card.
How to Choose a Credit Card
Know your credit score before you choose a credit card, because a higher score will enable you to choose the best credit card for you, often with better terms. With a credit score of 690 or above, you might qualify for a reward credit card without an annual fee. Research credit cards carefully to compare terms. Know about the fees, interest rate, balance transfer policies, grace periods and more. Some cards have lower interest rates and higher fees, or vice-versa.
Important Tips for Credit Card Management
Using a credit card responsibly is crucial for maintaining good credit and avoiding debt. Optimally, you should use the credit card only for purchases that you can and will pay off in full before the end of the grace period. Always make payments on time to avoid late fees and deductions to your credit score. Monitor your credit card statement each month. If you see unauthorized charges, contact the credit card company immediately so you’re not responsible for these charges.