Getting a no annual fee credit card as a second card

No annual fee credit cards tend to have slightly higher interest rates as well as less attractive extras such as insurance on the card and reward schemes.  However they can be very useful as a second credit card.

People often need a second credit card for a number of reasons.  A very common reason is that they are using the card for an employment.  Many employers will expect an employee to buy goods or services that they need for their job, such as plane tickets and hotel rooms, and to recharge these to the employer.  This will mean that the employee is essentially giving the employer a free loan.  This can be quite significant if the person already has a credit card balance that they are paying off, or if they have a current account mortgage.

For this reason many people have used a credit card to do spend their money for their job.  This means that the money is spent using the credit card which also means that the employee can take advantage of the interest free grace period.  This is the period between when a person pays on the credit card and when they start paying interest.  Within that time they will receive the statement.  If the employee collects their receipts and puts in the expenses claim as soon as possible then there will be no interest that is charged on the expenses.

For the employees who incur a large amount of expenses when they are on business for their employer, it may be a better idea to get a rewards card.  This is a card that gives rewards for using the credit card.  There may be higher rewards if a certain air line or hotel chain is used.  Alternatively it may be an idea to use a cash back card.  This will mean that the card holder will get cash rather than rewards points.  These tend to be less generous, but cash can be spent anywhere and rewards points can not.

As rewards credit cards charge fees, it is a good idea to measure how much the credit card charges and look at the expected annual value of the rewards.  If the value is higher than the fee it is a good idea to go with the rewards card as the second card.

Some business owners like using a no annual fee credit card as a business card.  This means that they can keep their personal and business expenditure separate.