Compare no annual fee credit cards
Annual fees can be one of the biggest costs in a credit card. With an abundance of deals on the market, here’s what you need to know when comparing credit cards with no annual fee.
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What are no annual fee credit cards?
As the name suggests, no annual fee credit cards don’t charge a yearly fee. In some instances, annual card fees may be waived for an introductory period of time. Otherwise they’ll be waived for the life of the card.
Annual fees are typically charged for account maintenance or to support features like frequent flyer programs, rewards programs and complimentary perks. However, if you know you’re a big spender or a reward points addict, no annual fee credit cards may not suit your spending style.
Before you apply, think about how often you use your credit card. If you’re looking for a backup credit card for those ‘just in case’ moments, or you really don’t use it that often, a credit card with no annual fee may suit your needs.
Will a no annual fee credit card make sense for you?
There's more to credit cards than how much you pay in yearly fees. Find out how.
What are the pros and cons of no annual fee credit cards?
Benefits of no annual fee credit cards:
- Saving money: The obvious advantage of credit cards with no annual fee is that it saves you money. Credit cards with no annual fee can potentially save you hundreds or thousands of dollars compared to cards that charge anywhere from $30 - $1,200.
- Cost-effective: Credit cards with no annual fees can help keep your overall card costs low as well as being cost-effective for those that don’t use their cards that often. If you know you’re not a big spender or a rewards program addict, these low frills credit cards can be a better suited option for your finances.
- Introductory deals: Some credit card providers waive annual fees for an introductory period of time. These can help ease the initial costs of signing up to a new credit card.
Disadvantages of no annual fee credit cards:
- Introductory deals: On the other hand, while these can be good value, you’ll want to make sure that you’re still benefitting when the promotional period wears off. Be sure to check the terms and conditions to ensure that the annual fee won’t cancel out any savings you may make.
- Less features: No annual fee credit cards may come with less features. These fees typically go towards supporting your rewards programs and complimentary perks, such as travel insurance. While some frequent flyer cards may waive annual fees, they generally go hand-in-hand.
- Other hidden fees and costs: Just because a credit card provider isn’t charging you one cost, doesn’t mean they can’t sting you in other ways. No annual fee credit cards may come with higher than average interest rates, minimal interest free days or just charge you other high ongoing fees. Do your research around all the costs you may be charged with your credit card.
What other credit card fees could I be charged?
Just because you’re not being charged an annual fee, doesn’t mean you won’t be charged other fees and costs. These may include:
- Foreign exchange fee: Charged when making a purchase in another currency (including online shopping), in addition to the normal exchange rate.
- Overseas charges: Fees covering the extra costs of processing overseas transactions
- Late payment fee: Charged if you fail to make a minimum repayment on time.
- Payment dishonour fee: Charged if you cannot afford a payment.
- Admin fee: Ongoing fees that are charged more frequently, such as monthly, to keep your account running.
- Paper statement fee: Charged for sending you a printed balance statement in the mail.
- Payment handling fee: Fees charged for making transactions. Can vary in person and online.
How do I choose the right no annual fee credit card?
With plenty of credit cards with no annual fee on the market, there is no such thing as a one-size-fits-all card. Here’s how you can help to choose the right card for you:
- Ask yourself what you’ll use the card for. Are you a big spender? Planning an overseas trip? Wanting to consolidate debt? Before you apply for a credit card with no annual fee, factor your spending habits into the equation.
- Compare interest rates. The purchase rate charged on a credit card is one of the biggest charges to consider. If you’re getting a no annual fee credit card to keep costs down, you’ll want to
- Compare other fees. As mentioned above, just because you’re not being charged an annual fee doesn’t mean you won’t be charged in other ways. Calculate the potential costs of keeping your credit card for a year or two. Then compare this to your spending profile and budget to see which credit card may suit.
- Use comparison tables. In a world of complicated financial jargon, comparison tables can help you to compare apples to apples. Use our comparison tools to filter down and compare different credit card purchase rates, interest free days, late payment fees and much more.
If you have a bad credit score, you might encounter two main problems. First, the lower your credit score, the more likely you are to be rejected when you apply for a loan or any other credit product. Second, if your application is accepted, the less likely you are to qualify for the lowest interest rates.
The reason Equifax, Experian and Illion use different scores is because they are independent companies with their own different methodologies. As a result, a score of, say, 700 would mean different things at different credit reporting bureaus.
However, the one thing they have in common is that they divide their scores into five tiers. So if you receive a tier-two credit score from one bureau, you will probably receive a tier-two score from the others, as well.
Yes, as credit card providers look at your annual income amount as well as your occupation. Minimum income requirements tend to be between $30,000 – $40,000 for standard and rewards credit cards, however low income credit cards can have minimum income requirements as low as $15,000 per year.
There are two reasons you should check your credit rating: so you have a better understanding of your financial position, and so you can take action (if necessary) to improve your credit rating.
Lenders use credit ratings or credit scores to assess loan applications. The higher your score, the more likely you are to get approved, and the more likely you are to be charged lower interest rates and lower fees. Conversely, the lower your credit score, the less likely you are to get approved, and the more likely you are to be charged higher interest rates and higher fees.
Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.
A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card.
For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.
Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.
Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.
Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.
There is no one-size-fits-all best rewards credit card. It's best you research what type of rewards program you'd like, as well as the fees, interest rate and conditions associated with those types of cards before making a choice.
Rewards credit cards can also come with high annual fees that may end up nullifying the rewards, so think how often you use the card to decide whether the benefits outweigh the extra cost for you. A card with a lower annual fee might require a lot of spending to get any useful rewards, while another card with a higher annual fee might need fewer purchases to get a reward.
Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.
Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.
Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.
Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.
Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.
If you’re wondering about how to make a credit card online application, here are some steps to follow:
- Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
- Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
- Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
- Review details. Ensure the information you’ve entered is correct.
Property Personal Finance Writer
A property and personal finance writer, Nick Bendel covers property, loans, credit cards, superannuation, and other bank products. Nick has previously written for The Adviser, Mortgage Business, Lifehacker, Business Insider, Yahoo Finance, and InvestorDaily, and loves getting elbow-deep in the latest ABS, APRA and RBA data.
Today's top credit cards products
Find popular credit cards lenders from a wide range of Australian. View All >