Temporary no annual fee credit cards

There are many no annual fee credit cards that do charge annual fees, just not as soon as the card is taken out.

No annual fee credit cards are cards that tend to be issued to people who are expected to spend a lot of money on the credit card.  This is because annual fees are one of three main ways in which credit card issuers make money.  These ways are annual fees, interest charged on cards and merchant fees that are charged to shops and service providers to process credit card payments.  The annual fee makes the least money on many of these cards.  This means that many of the credit card companies have created no annual fee credit cards that meant that the credit cards would make the money through the two sources of merchant fees and interest rates rather than the three sources that include annual fees.

These credit cards particularly suit the credit card users who do not use a credit card very frequently.  For these users a credit card’s annual fees are a particularly large part of their expense.

Sometimes cards that are advertised as having no annual fees are temporary.  This means that for the first year or two there are no annual fees, but this runs out after this time and annual fees start to be charged.

This means that it is very important for the credit card applicant to pay attention to the details of the credit cards that they are considering.  If it is advertised as having no annual fee, then the applicant should make sure that there is no time limit to the annual fee.  In effect a temporary waiver of the annual fee will not save that much money on a credit card over the long term, particularly if the annual fee is actually higher than it would be otherwise.

There may be other things that would recommend these cards, and they should not be overlooked.  There may be lower interest rates, longer interest free grace periods, better rewards or a cash back element.  The temporary no annual fee may only be a small part in the offering and if the rest of the credit card offering is good then the no annual fee element should be overlooked.  There should be some attention to how much the annual fee will be in two years time, as it will be a factor.