Do I lose out if I get a no annual fee credit card?

No annual fee credit cards are different from most credit cards as most cards charge an annual fee.  This means that the question about these credit cards is what has been missed.

One of the things that no annual fee credit cards can often do is to be very careful as to who they give the credit card out to.  If they limit the people to who they give their credit card to, in particular with the limits on the credit histories of who they can lend to, then they will cut down the defaults on their cards.

Interest rates on no annual fee credit cards are often higher than credit cards that have an annual fee.  This means that a person with a high credit card balance can often be better off with a card that charges an annual fee but that has a low interest rate.  Alternatively a person who does not have a high balance on their credit card will probably be better off without the annual fee, as they pay little interest any way.  It is a good idea to compare the credit card interest rate with the annual fee, and to work out what the difference would be to make the annual fee worth taking.

One thing that no annual fee credit cards may have is a shorter interest free grace period that is allowed between a purchase on the credit card and when interest starts to be charged.  If the credit card is not paid off every month then a shorter interest free grace period would mean that the interest rate is in effect higher as interest is charged for more days over the year.

There are also rewards and other perks that may not be present on a credit card that does not charge an annual fee.  These rewards can include cash back on a credit card, vouchers for money off goods or flights or a conventional rewards system that means that there are points awarded on a credit card and that this is then allowed to be used to select a reward from a catalogue sent by the credit card company.

If a credit card user spends a lot of money on a credit card then it may be a better idea to pay an annual fee and to get a reward credit card.