No Annual Fee Credit Card Comparison

If you don’t spend much on your credit card every month and always pay off your balance in full then you might want to consider how well your card compares to one with no annual fee – you could save yourself some money! Cards without an annual fee are available from many banks in Australia and many offer low interest rates, balance transfers and rewards to sweeten the deal even more.

Further Information on Credit Cards With No Annual Fees

No annual fee credit cards can be a great choice if you want to enjoy the benefits of a credit card without paying yearly charges for the privilege. As the name suggests, credit cards with no annual fee feature no annual fee, but there are several different types and the absence of this fee is often balanced with other charges and rates. The choice of not paying annual fees can seem a very attractive offer when you are looking for a credit card, but you should be careful because they are more suitable for certain types of customer, and not the best choice for others. If you are a careful spender and manage your finances sensibly, a credit card without any annual fees can be a good way of saving money.

If you want a credit card to use for infrequent purchases or to save for emergencies, a no annual fee credit card can be a wise choice. You can keep your card in a safe place, reserving it for occasional payments or for times when you need access to some extra funds, while avoiding the yearly charges for maintaining the credit card.

No annual fee credit cards are also suitable if you are able to always pay your monthly balance in full. The no annual fee feature is often balanced by a higher interest rate on purchases and cash advances, so if you can clear your balance each month you can also avoid paying the interest and keep the costs of using your card to a minimum. If you are likely to have an ongoing outstanding balance of your credit card at the end of each month then a no annual fee credit card is probably not for you, since the money you save on the fee could be negated by the higher interest rates you pay on the debt.

Along with often attracting a higher interest rate, credit cards without annual fees tend to have fewer features, rewards programs and other extras than other types of card. This is not really a concern if you rarely use your card, or don’t use the products and services associated with rewards schemes, and the benefit you enjoy is avoiding yearly charges.

Although they are usually more basic than other options, there are gold and platinum cards with no annual fees, which are available to customers with higher incomes and good credit ratings. While these cards generally don’t include the most prestigious services and extras of their high annual fee counterparts, they typically offer travel and payment insurance covers.

When you are comparing the various credit cards with no annual fees it is very important to be aware that there are different types of deals, and the no annual fee feature may change over time. A no annual fee ‘for life’ card should have this feature for the entire duration of your card being active. Many cards offer no annual fee for a limited period, typically for the first year, so it is crucial to study the terms and conditions to see how the deal alters after these period ends. You should also examine how different features such as interest rates, extra charges or special clauses in the small print are balanced against the benefit of paying no annual fee.

Three Tips for Using a Credit Card With No Annual Fee

Save your card for emergencies: If you usually make payments using cash or debit cards and only need a credit card for financial emergencies, this is probably the best way to use a no annual fee credit card. It’s reassuring to know that you can access some extra funds for unforeseen emergencies if they arise, but there is no point in paying an annual fee if you only use the card at most once or twice during the year.

Pay your balance in full every month: If you want to use your credit card for regular purchases but are sure you can pay the balance in full each month, this is another great way to use a no annual fee credit card. You can enjoy all the benefits of using a credit card without paying an annual fee or the interest on your purchases. If you are able to manage your spending and repayments correctly, this can be a really cheap way to own and use a credit card.

Use your card to finance occasional purchases: Similarly to reserving it for emergencies, a card without an annual fee can be used for planned purchases when the funds are not immediately available, but you are certain that you can pay the bill by the due date. In this way the card can be seen as a way to make occasional short term loans, covering payments and expenses ahead of pay day, rather than using it for regular spending.

Typical No Annual Fee Credit Card Features

No annual fee: When comparing no annual fee credit cards it is crucial to check how the deal actually functions. Is there no annual fee for the entire life of the card or only for the first year? Are there clauses such as minimum spend to maintain the no annual fee after the first year? And how are the card’s other charges and fees balanced against the no annual fee feature – are you really saving money in the long run? Check all the features and terms and conditions before choosing a card.

Interest rates: Credit cards that don’t have an annual fee often feature higher interest rates on purchases and cash advances than other types of card. Any unpaid balance on your monthly bill will attract interest at these rates, so it is important to familiarise yourself with these figures and see how much your card could cost if you are unable to clear the balance.

Interest free days: Many credit cards feature interest free days, often 44 or 55 days. When you make a purchase, you have this amount of time to make the due payment on your bill before interest starts to build on the debt. If you intend to use a credit card regularly and meet all monthly payments it is important to understand how many interest free days your card features and what type of purchases are covered. Knowing exactly how long you have to pay can help avoid the cost of interest on your balance.

Other features: You should also examine other features available with a no annual fee card such as balance transfers, insurance policies and other extras. While this type of product is associated with no-frills credit card usage, you may find attractive deals that fit in with your finances and lifestyle.