No Fee Credit Card
No fee credit cards are a new credit card feature that several credit companies are offering to remain competitive. A no fee credit card refers to a card that charges no annual fee. It may also allow for one late payment without charging a late fee. Many no fee cards also include a reward program. By considering all of the features of a credit card, you can find the best no fee credit card for your needs.
Your Credit Rating and the No Fee Credit Card
No fee credit cards are typically available to consumers with better
credit ratings. Not everyone qualifies for a no fee credit card. For this
reason, no fee cards can be hard to find. Check your own credit score
before applying for a no fee card.
Savings from a No Fee Credit Card
If you qualify, a no fee credit card may save you money. How much money
you save depends on how much you are paying for the annual fee on your
current credit card and what sort of rewards the no fee card includes. It's
important to understand that the interest rate on a no fee credit card is
usually slightly higher than the interest rate on other credit cards.
That's why it is best to pay your balance in full each month if you
can.
Ask Your Card Issuer to Waive The Fee
If you have good credit, you may be able to ask your current credit card
issuer to waive the annual fee. Many credit companies will agree to make
this concession rather than lose a good customer. It never hurts to
ask!
Penalties
The no fee offer from the credit company is based on you making payments
on time and not exceeding the credit limit. If you miss a payment or go
over your credit limit, then you can expect the interest rate on your
credit card to increase. You may also be charged a penalty for the late
payment, especially if it is not the first time that you've missed a
payment. Even if the card does not charge a fee for the first missed
payment, it will still be reported to a credit bureau.
Changes in a No Fee Credit Card
Remember that a no fee credit card may start to charge fees at the
issuer's discretion. The no fee characteristic may be part of a promotion.
Many cards, for example, do not charge an annual fee for the first year.
Or, the card issuer may simply change their policy regarding fees. Be sure
to read all notifications that you receive from your credit card
company.
The Bottom Line
Not having to worry about annual credit card fees can be a nice feature
for a credit card. If you currently pay a high annual credit card fee, then
a no fee credit card may be for you. When you get your no fee card,
remember to make your payments on time or your interest rate may increase.
You may also be able to ask your current credit card lender to waive the
annual fee on your current credit card.
