No Fee Credit Cards - Pay Nothing Extra

No fee credit cards have attractive features such as no annual fee, no late fee, no over limit fee, no online account access fee, and no balance transfer fee.  However, no fee credit cards may have higher interest charges compared with regular credit cards.  Such cards are ideal for people who rarely use their credit cards and choose to pay through it only when there is an emergency.

Card users have a wide range of credit cards to select from.  You have low interest credit cards, balance transfer credit cards, reward credit cards, instant approval credit cards, cash back credit cards, airline credit cards, credit cards for bad credit, business credit cards, student credit cards and prepaid debit cards.  Every credit card has its own advantages and disadvantages.  The common feature of all the credit cards is some or the other fee associated with it.  However, no fee credit cards attract no fee as the name suggest.

How To Get The No Fee Advantage - To reap optimum benefits of the no fee credit cards, the cardholders need to pay off their monthly credit card dues religiously at the end of every month.  If they delay their payments, there are chances that they might end up paying significant finance charges over time, as the interest component of such cards are usually higher than the regular credit cards.  This could offset all the other benefits that the cardholders may have enjoyed had they repaid on time.

Users have the options of choosing secured no fee credit cards or the unsecured ones.  Both have high interest charges, hence, the users must be careful while making transactions with such cards and see to it that they can comfortably pay off their dues at the end of every month.

Secured No Fee Credit Cards - To avail of secured no fee credit cards, the users need to deposit a stipulated amount or above in their savings account for the purpose of security.  The user's credit line, in this case, is a percentage of the amount deposited.  After determining the user’s credit line, the credit card company issues him/her a credit card.  The users, in this case, enjoy a spending limit that is equivalent to their credit lines.

In case you fail your monthly dues on or before the date specified by the lender, the lender is authorized to recover its costs by using the amount deposited in your savings account as collateral.  Secured no fee credit cards are generally meant for people who have bad credit scores because they may have defaulted in repayments in the past.

Unsecured No Fee Credit Cards - Such credit cards do not necessitate their users to deposit any amount as collateral or security against their credit.  However, these cards offer low spending limit as compared with the secured cards for bad credit.  They are issued only to those customers who have good credit scores and have demonstrated their ability to repay on time in the past.  Moreover, such credit cards charge higher interest rates compared with the secured cards.

If the users pay their dues on time, then the lenders might consider increasing their credit limits.

While availing for secured or unsecured no fee credit cards, ensure that the lender has a system of reporting your credibility to one of the national credit bureaus.  A good record with the credit bureaus helps you to get loans, regular credit cards, and other credit facilities from the lender in future.

Check The Features Of Your No Fee Credit Card - You must check what your no fee credit card’s interest rate is.  The lenders may give you attractive offers, such as, low introductory rate to lure you into the deal.  It is, however, your responsibility to consider the long-term benefits of the card and not just the short-term yields.  If the interest rate on your card is high then you pay huge penalty charges in case of a default.  Moreover, no fee credit cards like other credit cards may have some hidden fees and various such factors that may dampen the benefits that you would have otherwise reaped.  Check for all these factors in your contract with the lender.

You must also check the minimum monthly payments for your no fees credit card, which you would need to pay in case you do not have sufficient funds to pay the entire dues; minimum monthly payment is calculated as the principal of the balance on your no fee credit card account.

Find out what grace period the lender is offering on your no fee credit card; grace period refers to the period between the date of purchase to the date when you are required to pay for the purchased good.  The higher the grace period the more flexibility you enjoy.  Hence, prefer a card that offers you a higher grace period.

Most importantly, check your card limit.  If you are ignorant of this, you might continue spending even after you have no space on your card.  This can land you into financial mess.  The attractive features of no fee credit cards are perfect for the well-informed, responsible user.