Having a credit card with no annual fee adds to the plenty of advantages that possessing a credit card entails. Consumers, in general, feel interested in owning this type of bank product because they do not get inconvenienced with additional charges, such as the yearly fee which standard credit cards have. Holding a credit card with no annual fee furthers consumers’ convenience, too. It is because they can enjoy seamless shopping experiences, relish exclusive perks and rewards, and possess an emergency line of credit, among plenty of others.
Explaining the Concept of Zero-Annual Free Credit Cards
A credit card annual fee is a convenience charge that credit cardholders need to pay every year. Banks bill their customers with this payable for utilising the former’s credit card services. For experienced credit cardholders, credit card charges such as annual fees can be discouraging. Although these consumers get to enjoy the comforts of cashless shopping, this benefit comes with a price because of the yearly charge which they need to settle.
Hence, some people feel reluctant to own a credit card. Plenty of them do not want to get inconvenienced by the necessity to pay for any interest charge, which may be an unwelcome addition to their financial obligations.
Nevertheless, banks and other financial service providers today offer convenient products such as a credit card with no annual fee. These bank cards can have their yearly charges waived for life, or restricted in nature. The latter pertains to credit cards that require yearly minimum spending, and those that have annual fees free of charge but only for a limited period.
For financially savvy consumers, availing of a zero-annual fee credit card is a preferred option. In this way, they can avoid paying additional charges. Also, they can save more of their hard-earned funds.
Four Examples of Zero-Annual Fee Credit Cards
Consumers who do not like settling the yearly fees of their credit cards can switch to a credit card with no annual fee. This money-saving choice saves credit cardholders from paying the providers’ charges that can amount to $400. As of June 2020, the following are some examples of zero-annual fee credit cards:
1) Coles No Annual Fee Mastercard
Supermarket giant Coles issued this popular credit card with no annual fee. Citigroup is the providers’ underwriter for this bank product. The Coles No Annual Fee Mastercard features a 55-day, interest-free period and a purchase rate of 19.99 per cent per annum. Credit cardholders who avail this kind of bank card can enjoy some essential perks.
One of them is the protection insurance for merchandise bought. This benefit features customers’ items purchased using the credit card getting covered if these products get stolen, accidentally destroyed, or lost permanently. Besides, credit cardholders with the Coles No Annual Fee Mastercard can enjoy flybuys points. This perk features consumers earning one point every time they spend $2. The qualified items for this benefit do not comprise gift cards and tobacco.
2) Bank Australia Visa Credit Card
This low-frills credit card has a reasonably low interest rate amounting to 12.39 per cent per annum. Aside from this purchase rate, this bank product features an interest-free period that lasts for 55 days. Plus, credit cardholders can relish safe online shopping with the Visa Checkout perk, as well as the 24/7 fraud monitoring advantage.
The Bank Australia Visa Credit Card consists of more security features, such as the card controls that allow transaction method management. Also, this no-annual-fee credit card enables the credit cardholder to put a temporary lock on the bank card when he believes it might have got stolen or he misplaced it.
Consumers can make custom notifications to monitor their credit card activities with this bank product. Besides, they can transfer funds instantly between their credit card and Bank Australia savings account. Google Pay and Apple Pay are accessible via the Bank Australia Visa Credit Card as well.
3) Latitude Financial’s 28 Degrees Global Platinum Mastercard
Latitude Financial Services offers a credit card with no annual fee called the 28 Degrees Global Platinum Mastercard. Consumers will encounter the 21.99-per cent per annum purchase rate and an interest-free period that lasts for 55 days. Besides, they can relish $0 worth of currency conversion or international transaction charges.
Moreover, Latitude Financial’s 28 Degrees Global Platinum Mastercard features a few additional benefits compared to other bank products. Thanks to Boingo hotspots, credit cardholders can enjoy Wi-Fi access free of charge globally at over one million hotspots. Also, this zero-annual fee credit card has the ‘Flight Delay Pass’ benefit. Customers can, therefore, access lounges when their flight gets delayed.
4) ING Bank’s Orange One Credit Card
This bank product is one of the credit cards that offer great value. It features an 11.99-per cent per annum purchase rate and an interest-free period lasting for 45 days. Besides the no-annual-fee benefit, consumers can enjoy rebates on ATM and international transaction charges. They simply have to satisfy some conditions.
The ATM and international transaction fee rebates are applicable to credit cardholders who utilise the instalment plan of ING. These consumers can receive a lower interest rate that amounts to 9.99 per cent per annum. Furthermore, credit cardholders can relish the rebates perk by using their ING credit or debit card in making more than five settled card purchases in one month.
Depositing more than $1,000 monthly from an external bank account into an ING account in the name of the credit cardholder also qualifies the latter for the rebate. However, he should not have the Orange One and Living Super accounts because these are not eligible for the ATM and international transaction fees rebate.
A credit card with no annual fee is undoubtedly an enticing bank product. Consumers who want a credit card to keep in their wallets and not think much about it will surely not think twice of getting this kind of bank product. However, zero-annual fee credit cards come with trade-offs. Prospective credit cardholders will not get any unwelcome surprises later on if they understand these kinds of compromise.
Trade-Offs That Come with Possessing a Zero-Annual Fee Credit Card
Credit cardholders who feel enticed to switch to a credit card with no annual fee should keep in mind that this bank product has trade-offs. The perks that these plastic cards come with can be limited or offered in exchange for other must-have benefits. Here are four examples of these trade-offs:
1. Consumers should watch out for high minimum credit limits.
A zero-annual fee credit card typically comes with a minimum credit limit. This amount can be as low as $1,000 or as high as $6,000. Financially responsible credit cardholders who diligently live within their means can find themselves far from any problem. Nevertheless, consumers should be wary with the high minimum credit limit. It is because this scenario translates to the fact that their provider has offered them plenty of leashes with which they can run.
2. Students and unemployed consumers should reevaluate their need for a credit card.
A credit card with no annual fee may feature income limits similar to plenty of credit card offerings. These restrictions can be quite low and, in some cases, can be in the neighbourhood of $35,000. But university students or people out of work may not find themselves qualified to own a credit card because of their existing situations.
3. Zero-annual fee credit cards can be relatively light in terms of features or benefits.
This trade-off of switching to a no-annual-fee credit card can lead to a consumer missing out on additional advantages. Among these perks can be the international travel benefits, like lounge access, and the tip-top rewards point programs. But some no-annual-fee credit cards could still feature these benefits, such as limited points programs and international transactions which are free of charge.
4. Credit cardholders should keep an eye on interest-free periods and interest rates.
Consumers who want to enjoy their zero-annual fee credit card can do so, but not totally. It is because some of these bank products feature brief interest-free periods lasting only for 44 days. Also, the interest rates can be 20 per cent per annum or higher.
Indeed, there is no such thing as a lunch meal which is free of charge. A credit card with no annual fee can have a briefer interest-free period or can hit the credit cardholder with a higher interest rate. Nonetheless, consumers can still relish these bank products that could work well with their needs. They just need to look at the finer details of no-annual-fee credit cards and be aware of what they are getting. In this manner, they can maximise their enjoyment of these plastic cards.