Advantages and disadvantages of credit cards with no annual fee
Credit cards with attached rewards programs often have annual fees and interest-free days. This type of cards is more suitable for people who use their cards frequently. However, although this card offers many advantages to cardholders, it will come with high interest rates.
Advantage
– Extremely low interest rates
– Low credit limit
– interest-free days
– Introductory promotional offers
Disadvantages
– High interest rates for cash advances
– It will cost more once the introductory period ends
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 credit cards with no annual fee are the natural alternative for most people. This card often comes with interest-free days, usually around 50 days on purchases.
In addition to this, 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 of the cards with no annual fees 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 generate higher interest rates of about 15% once you withdraw money through an ATM with your card. Please note that transferring money over the phone or Internet from your card to your bank account is also considered a cash advance. Of course, some banks offer special introductory offers to potential customers. These offers include low balance transfer fees for a specified period of time, typically for the first six months or no annual fees for the first year.
While these specials, particularly low-interest introductory ones, may seem appealing, they are somehow designed to dazzle and then ensnare uninformed customers. It will be a huge shock to find out that the promotion has ended and the card returns to full fare. That is why it is essential to read the fine print before signing any document.
