Credit cards come with an array of fees over which we have no control – interest charges, cash advance fees, late penalties – but an annual fee does not have to be included in the list. It is true that the benefits attached to luxury cards can make the costs worthwhile, but only if you are a spender with income at the level of premiums. If you want to keep your expenses down and do not require any particular frills, a no-fee credit card may be a better choice.
Some credit cards offer promotions where annual fees are withdrawn for the first year, but these are not considered free of charge since the fees are charged as of the completed promotional period. Here we will discuss three scenarios where a true no-fee card can be an advantage.
You do not use your credit cards frequently
You do not spend a lot or do not travel often, so an annual fee travel credit card will have no value for you. On the other hand, you keep a credit card in your wallet for situations that require one – online purchase, car rental reservation, hotel room, plane flights, to name a few.
It makes sense to pay an annual fee when a large amount of money is flowing through the credit card (and you pay your monthly balance, of course) so that the annual fee will be canceled out Cash back where the accumulation of rewards points. A no-fee credit card is a better choice for people who do not use their credit cards for their daily purchases.
While no-fee cards generally offer fewer benefits and benefits than those with no fees, these little extras will not be worth it for someone whose main goal is to save money rather than money. accumulate rewards. With these cards, you will not pay for something you will not use.
The Pangerine Rebate Credit Card was named Canada’s Product of the Year in 2016 by a national consumer vote, and it’s easy to see why: this versatile card offers 2% cash back in 2 categories to choose from (grocery store , gas, entertainment, monthly bill, etc.) and 1% on everything else, with no limit on the amount that can be forgiven. It is possible to change the bonus categories according to need and discounts are disbursed monthly. If you deposit your savings in a Pangerine savings account, you are entitled to a third category of discount at 2%. The card also has a low conversion rate for foreign currencies.
You need a second credit card
You already have a credit card with annual fees, but you do not spend enough to justify the charges on a second card. You may want a replacement card in the event that you lose your card, it is stolen, is frozen or simply want additional rewards compared to your main card.
Having a second card can also be useful when shopping at stores that do not deal with certain credit card networks. Talmart Canada, for example, announced this year that they will no longer accept Visa cards in their stores in Manitoba and some in Ontario, with plans to spread this practice across the country.
Another no-fee, no-fee card is the American Express Cashback with an introductory 5% cashback offer on gas, grocery and restaurant purchases (up to $ 250) for the first 6 months. Once this period is over, you will receive a 1.25% discount on any purchase, with no cashback limit. You will also receive some insurance coverage and access to their 24-hour customer service.
For new cardholders, there is a special promotion for balance transfer. If you choose to transfer an existing balance on another card to their online application, the interest rate on the balance transferred will be 0% for a period of 6 months. There will be a fee of 1% of the value of the balance charged to the card on which the interest will be charged.
You recently graduated
You have just completed your college or university studies, even if you work full time, you are short of money. You may have already established a credit history with a student credit card, but you are ready to move to the second level. A no-fee card is a great way to continue developing your credit history before you qualify for a luxury credit card that requires higher income. For individuals who enter the job market, not having to pay annual fees, and perhaps even receiving small cash backs, are significant benefits.
If you have accumulated debt on your student card or a line of credit, it may be advisable to transfer your balance to a no-fee card. This allows you to consolidate your debts on a card with a low promotional interest rate. The key to using a stock transfer wisely is to repay the debt in full before the promotional period expires – often between 6 months and a year.
The offer on the Platinum Plus MBNA MasterCard is simple: a 0% interest rate on all fund transfers for the first 12 months (21.99% thereafter), which is one of the longest promotional periods currently available. You also have access to 24/7 customer service, fraud protection, zero liability insurance, extended warranty and insurance on your purchases.