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No Annual Fee Credit Cards
Tuesday March 17, 2009
No annual fee credit cards are just that. They are credit cards with no annual fees that are designed to save you money as long as you follow the guidelines. That is, if you rarely use your credit card and pay back any repayments quickly. The trick with no annual fee credit cards is that they tend to have a higher interest rate than that of the low annual fee credit card, but again, this would only affect if you do not make the repayments within the allocated time.
The reasoning behind the higher interest rates and high rates on cash advances on no annual fee credit cards from a credit card issuer perspective is that they are trying to guarantee some sort of return on investment. Banks and financial issuers are basing the no annual fee credit cards on the chances that the credit cardholders won't make the repayment in time and pay on then higher interest rates, thereby taking the investment up to that of a low interest rate credit card.
However, if you know your own financial style and are confident that you will not be using your credit card that often and will be making repayments before time is up than the no annual fee credit cards would be perfect.
