Credit cards come in various types, each with its unique features and benefits. One of these types is the no annual fee credit card. As the name suggests, these credit cards don’t charge an annual fee. In this article, we’ll dive into the pros and drawbacks of no annual fee credit card so you can make a confident decision while choosing a credit card that’s right for you.
Why Credit Cards have No Annual Fee?
Credit card issuers provide no annual fee credit card to attract more customers. These cards are an excellent option for people who want to avoid paying an annual fee and still enjoy the benefits of a credit card. No annual fee credit cards are also a good option for people who don’t use their credit cards very often.
Different Type of No Annual Fee Credit Card
No Annual Fee Lifetime
Some credit card issuers offer no annual fee credit cards for life. These credit cards don’t charge an annual fee as long as you use the card regularly. These cards are an excellent option for people who want to avoid paying an annual fee and also want to keep their credit card for a long time.
No Annual Fee for the First Year
Some credit card issuers offer no annual fee credit cards for the first year. These credit cards don’t charge an annual fee for the first year, after which you’ll be charged an amount as a renewal fee. The best part is there is one offer of annual fee waiver which is usually spend based and by spending a limited amount, cardholders can get annual fee waived.
Pros of No Annual Fee Credit Card
1. Save Money: No annual fee credit cards can save you money on fees. If you’re not a frequent credit card user, paying an annual fee doesn’t make sense.
2. Easy to Manage: No annual fee credit cards are easy to manage, as you don’t have to worry about paying a renewal fee. You can use your card without worrying about additional fees.
3. Good for Credit Score: No annual fee credit cards can help improve your credit score. These credit cards are an excellent option for people who are starting to build their credit history.
4. Rewards: No annual fee credit cards also offer rewards, such as cashback, points, or miles. These rewards can add up over time, giving you more value for your money.
Cons of No Annual Fee Credit Card
1. Fewer Perks: No annual fee credit cards offer fewer perks than credit cards that charge an annual fee. These perks can include travel benefits, concierge services, and exclusive access to events.
2. Higher Interest Rates: No annual fee credit cards often come with higher interest rates. If you don’t pay your balance in full each month, you could end up paying more in interest charges over time.
3. Lower Credit Limits: No annual fee cards come with lower credit limits than credit cards that charge an annual fee. This could limit your ability to make larger purchases.
4. Limited Rewards: No annual fee credit card often have limited rewards programs. If you’re looking for a credit card that offers more rewards, a credit card with an annual fee might be a better option.
Also Read: How To Apply for Bank of Baroda Credit Cards Online
Conclusion
No annual fee cards are an excellent option for people who want to avoid paying an annual fee and still enjoy the benefits of a credit card. These credit cards are easy to manage, can help to build your credit score, and offer rewards. However, they also come with some drawbacks, such as higher interest rates, lower credit limits, and limited perks. When choosing a credit card, it’s essential to consider your needs and preferences to find a credit card that’s right for you.