1. Being Fooled By Introductory Offers – No fee credit cards come in many types, and some have a no fee feature as an introductory offer. With this type of card you will not pay an annual fee the first year because of the introductory offer but after the initial year period you may be shocked to be charged an annual fee. Make sure you know whether the no fee feature is a short-term introductory offer or a permanent feature of the credit card you choose.
2. Paying A Higher APR In Exchange For No Annual Fee – Some credit cards advertised as no fee cards offer a permanent no fee feature but make up for this by charging an outrageous annual percentage rate. Make sure you are aware of the interest rate you will pay annually on any account balances from month to month. In some cases a credit card with an annual fee and a much smaller APR may be a better option instead.
3. Ignoring All Balance Transfer Offers – It is true that most no fee credit cards do not offer any balance transfer deals but there are a few that may. If you have excellent credit and the required income a few of the top card issuers may offer a no fee card that has balance transfer options. If you are paying an annual fee and a higher rate of interest then transferring the balance to a new card with no annual fee may make sense.
4. Not Reading All Of The Fine Print – Whether the credit card you are considering charges an annual fee or not make sure that you read all of the fine print before agreeing to the terms of a card. Often companies will hide additional fees and expenses in the fine print and you may not realize it until you get the first bill. You could end up with no annual fees but be charged an account maintenance fee or other expenses instead.
5. Not Comparing Different Cards Before Choosing One – No fee credit cards are all different, and you should compare all of your options before finally choosing the right card for you and your situation. Some of these cards have a lower interest rate, some may offer balance transfer features, and some will even include perks for valued customers along with the no fee feature.
6. Not Calculating The Total Cost To Own and Use The Card – Each credit card option will include a variety of costs and charges, and an annual fee is only one element that needs to be considered. When shopping for cards make sure you calculate the total cost of owning and using each card to see which one is more cost-effective to use.
7. Believing That All No Fee Cards Are Those Without Any Perks – While most no fee credit cards are also considered no frill options this is not always true. If you have excellent credit there are some cards that do not charge a fee and will also offer you the perks that you are looking for. This is less likely if you have poor credit though.
