Free Credit Cards
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A free credit card doesn’t require the cardholder to pay any application fees or annual fees. This is why these types of credit cards are refered to as “no fee” credit cards. Free credit cards are generally issued by financial institutions to make their cards more attractive.
Free credit cards are offered to people who have:
A free credit card doesn’t require the cardholder to pay any application fees or annual fees. This is why these types of credit cards are refered to as “no fee” credit cards. Free credit cards are generally issued by financial institutions to make their cards more attractive.
Free credit cards are offered to people who have:
- An impressive credit card rating
- A healthy credit history
However a free credit card doesn’t mean the cardholder pays no charges except credit balance repayments. Free credit cards also bear interest rates.
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Features of Free Credit Cards
A free credit card has certain basic features, such as:
- No annual fees
- Low renewal fees
- Some cards have an introductory 0% APR (Annual Percentage Rate) offer for a limited period. Thereafter, low interest rates are charged on the balance that is carried forward each month.
Free Credit Card Benefits
A free credit card may also entitles members to benefits such as:
- No late charges.
- No charges on cash advances.
- No charges on the transfer of balance from one card to another.
- No advance payments have to be made to receive a card.
- Works best for small business enterprises.
Problems Related to Free Credit Cards
Some free credit card issuers may offer no late payment charges for an initial period to give the cardholder a lax attitude when it comes to balance repayments. However, if a cardholder regularly delays payments, the card issuer may report the late payment history to credit reporting agencies. As a result, the cardholder’s credit history can be tarnished.
Other disadvantages of free credit cards include:
- The interest rate charged on delayed payments is usually higher than that charged by other credit cards.
- Free credit cards usually do not offer reward programs, such as cash credits, airline miles or gift certificates.
Free Credit Card Issuers
Free credit cards are issued by:
- Financial institutions, such as banks
- Large stores
A free credit card might not necessarily be the best deal for you. Before you apply for a credit card, compare its features and terms with other types of credit cards.
Credit card companies are free to make changes to the terms and conditions of the cards issued by them. These changes to your credit card can have a severe financial impact. It is, therefore, crucial that you read about all the changes made. Investing a little time and effort in making comparisons with other cards can help you save substantially in the long run.
