What is an Annual Fee?
The annual credit card fee is a one-time charge on your credit card that must be paid during a particular time within the year. This is determined by the card issuer or divided accordingly and charged to your monthly account.
The article talks about the following:
- Basic Rule about the Annual Credit Card Fee
- Credit Card Agreement
- Credit Cards without Annual Fees
What is the Basic Rule about the Annual Credit Card Fee?
You can avoid an annual fee by having a certain amount charged on your credit card during the year. You can contact your credit card issuer to find out how this annual fee can be waived.
If your credit card issuer decides to impose a new annual fee or raise the current one, the company is required by federal law to inform you 45 days before the new annual fee becomes effective. You have the option to reject the new annual fee. However, you will have to close your credit card if you decide to drop the card which can hurt your credit score.
Pls See: credit.about.com
What is the Credit Card Agreement?
Once a cardholder chooses to register a credit card in his or her name, there is the need to go through the entire screening process of analyzing one's credit limit or credit bank. This can be done through the credit bureau. This is an organization that has access to information about the financial history of a person if credit card payments were made on time or not.
When the application is approved, the credit card agreement is signed and the customer has to pay the initial annual fees. Majority of credit cards are valid for more than one year. However, annual fees are charged or billed to one's account annually on the day that the credit card agreement was signed. The average annual fee for Canadian credit card banks and companies is approximately $18 to $20. This amount is higher in the case of gold or platinum cards.
However, there are some companies and banks that do not charge annual fees. One example is the AT&T Universal Cards and other major banks.
Pls See: Canadian-money-advisor
What are Credit Cards without Annual Fees?
There are no annual fee cards for consumers wishing to avert paying this fee. There is really no difference between cards charging a fee or none at all. The real difference lies in the individual benefits and features brought. Consumers living on a strict budget and individuals who are interested in a credit card for its basic features are those who are interested in signing up for a no annual fees card. Some credit cards do not charge an annual fee throughout the first year of card use or a number of billing cycles after a first purchase. The typical features of cards without annual fees are the following:
No Annual Fee with an annual interest rate for cash advances of 19.8%
Low long-term rate of 5.99% on purchases and balance transfers guaranteed for 3 years (as long you pay your bills on time)
After three years, the rate will stay low and become a variable rate at +4.99% on purchases and balance transfers
Save money when you transfer high-interest debt with our no-fee balance transfer service.
Pls See: creditcards-offer.ca
Benefit of Waiving the Annual Fee
Aside from the usual perks, rebates and benefits, waiving the annual fee of credit cards is a big come-on for would-be card holders. That is why credit card companies which do not charge any annual fees are popular among consumers.