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Don't pay annual fees on your credit card

Don't pay annual fees on your credit card

RateCity takes a look into the world of fee-free credit cards and shows you the best fee-free cards currently on the market.

May 27, 2010

Decisions, decisions. There are so many credit cards available right now, from ones that charge no fees to ones that offer instant rewards, so how do you know which one is best for you? The solution may be all in the annual fees or lack thereof.

There are a range of credit cards currently on the market that do not charge an annual fee, which are often referred to as fee-free credit cards. These types of cards are a great option for users who don’t want to outlay extra money each year for the privilege of using a credit card. Fee-free credit cards are essentially the “free” credit card option if you use them right.

Who best suits this type of card?
Australians who will best suit this type of credit card and benefit the most are non-frequent users who use their credit card once or twice a month or who rely on their credit card for only emergencies.

They will also suit people who enjoy the convenience that a credit card offers and who don’t like carrying around a lot of cash. But if you pay off your debt each month, virtually anybody can benefit from the free service of having a credit card.

Many people have this type of card as their second card or as a backup card to take travelling. They are also great for small business owners looking for a cost-effective credit facility to assist in their day-to-day activities.

Buyer beware!
Like any credit card option, there are a range of disadvantages that come with this type of card. When deciding on the best fee-free credit cards, here are some tips of what to be aware of:

  • Most financial institutions offering credit cards with no annual fees often charge a higher interest rate than cards that charge annual fees.
  • Check if rewards programs are available as some may not offer this.
  • Some institutions only offer the fee-free option for a limited time, this is usually more the case with balance transfer cards, so be sure to check the fine print before proceeding with your application.

Get the most out of your fee-free credit card
If you have decided that this type of credit card is the best fit for you, to ensure that you will get the most out of it and ultimately save more make sure you compare credit cards online to find a no annual fee card that also offers a low interest rate.

For example, RateCity lists the best standard low rate credit cards with no annual fees (as at May 18, 2010):

  • HSBC Visa credit card at 16.99 percent
  • Coastline Visa at 17.2 percent
  • American Express Blue Sky at 19.99 percent
  • Bank SA Visa or MasterCard at 20.24 percent

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