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.
Heritage Bank Gold Low Rate
An ongoing low variable interest rate, plus lots of features, makes this one of our most popular credit cards.
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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.
A credit card is a payment method which lets you pay for goods and services without using your own money. It’s essentially a short-term loan which lets you borrow the bank’s money to pay for things which you can pay back – potentially with interest – at a later date. Credit cards can also be used to withdraw money from an ATM, which is known as a cash advance. Because you’re borrowing money from a bank, credit cards charge you interest on the money you use (unless you repay the entire debt during the interest-free period). When you apply for a credit card, the bank gives you a credit limit which sets the maximum amount you can borrow using your card. Credit cards are one of the most popular methods of payments and can be a convenient way of paying for goods and services in store, online and all around the globe.
A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.
If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.
Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.
When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.
It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.
Credit cards are a personal responsibility, so getting a credit card is up to your specific financial wants and needs. As a hypothetical, ask yourself if you could afford repayments on the maximum credit limit offered by a credit card you may be interested in.
Also, consider all the pros and cons of taking out a credit card before you sign on the dotted line. Pros include the fact that credit cards can be a good way of paying for purchases, earning rewards points and building a credit history. Cons include how credit cards can be expensive and put a lot of financial pressure on you.
There's no such thing as a free lunch. All credit cards come with associated costs when used to make purchases, even if it’s simply the cost of making repayments.
However, many lenders offer incentives for customers such as a $0 annual fee or 0 per cent interest on purchases during an introductory period. Additionally, paying off your balance in full during an interest-free period means you could only have to pay back the cost of purchases without interest. You could also be eligible for additional rewards such as cashback during that time, saving you more money.
There are a few ways to pay a credit card bill. These include:
- BPAY - allows you to safely make credit card payments online.
- Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
- In a branch.
- Via your credit card provider's app.
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.