Advantages and disadvantages of credit cards with no annual fee
Credit cards with accompanying rewards programs often come with annual fees as well as interest-free days. This type of card is best for people who use their cards frequently. However, while this card provides many benefits to cardholders, it will come with high interest rates.
– Extremely low interest rates
– Low credit limit
– interest-free days
– Introductory promo deals
– High interest rates on cash advances
– It will cost more after the introductory period is over
For this reason, this card is not recommended for people who cannot pay more than the minimum monthly balance, especially those who do not have a stable source of income. That’s why no-annual-fee credit cards are the natural alternative for most people. This card often comes with interest-free days, usually around 50 days for purchases.
In addition, cards with no annual fees come with low interest rates. The minimum monthly payments are also lower compared to personal loans, but this will come at a high interest rate. The low credit limit on no-annual-fee cards also has its advantage as it keeps the cardholder’s expenses under control.
On the other hand, there are many people who do not know that cash advances carry higher interest rates of approximately 15% after you withdraw money through an ATM with your card. Note that transferring money over the phone or the Internet from your card to your bank account is also considered a cash advance. Of course, some banks offer special introductory deals for prospective customers. These offers include low balance transfer rates for a set period of time, usually for the first six months or no annual fees for the first year.
Although these special offers, especially the introductory low interests, may seem attractive, they are somewhat designed to dazzle and then trap uninformed customers. It will be quite a shock to find that the promotion has ended and the card reverts to full price. This is why it is extremely important to read the fine print before signing documents.
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