Credit card annual fee is the amount you pay every year in order to continue to take advantage of all the rewards, benefits and additional privileges that come with it. But opting for such a credit card can be justified only if you avail maximum benefits and best credit card offers india. While it totally depends on how you use your credit card, a basic credit card with zero annual fee may lack airport lounge access, Priority Pass membership, and other features. Here we aim to explain why an annual fee makes sense and how you can make the most of it.
Why do card issuers charge an annual fee?
Credit card issuers charge you an annual fee to cover the cost of providing you with a variety of features and benefits. Overall, they will not be able to provide you the additional benefits for free. If you want to enjoy the benefits of a luxury credit card or earn great rewards on your purchases, expect to pay an annual fee.
Companies may charge an annual fee for some cards that offer generous cardholder benefits, such as travel credits, special rewards opportunities or free checked baggage on flights. You generally pay more per year for the cards that come with the most perks.
Other times the credit card may have an annual fee if it is designed for borrowers with fair or bad credit. The interest rates on these types of cards can also be high. The good news is that once you build credit with the card, you may be able to qualify for a card that has lower fees (or none at all) and a better interest rate.
How is the credit card annual fee charged?
The annual fee charged by the issuer is different from any interest payments you may have on your account. The fee is typically charged in a specific month of the year, usually on the anniversary date of your card’s opening or at the beginning of the calendar year. However, some issuers split the fees and assess them monthly to lighten the burden of paying the full amount at once.
How to Waive Your Credit Card Annual Fee
In some cases, credit card firms can waive the annual fee for the first year as a brand new cardholder incentive. If you are an existing Card member and an intro offer is not on the table, you may be able to call your card issuer to request a one-time discount.
Compare Cards Before Applying
Credit cards with zero annual fee for the card makes sense for your budget depending on your spending habits and the benefits the best credit card offers india.If you travel rarely and barely use a credit card, selecting one with an annual fee might not be worthy as a result of you’ll not see enough profit to justify the fee.
On the other hand, if you spend heavily in a certain purchase category and the credit card rewards you for it, paying an annual fee for premium perks and rewards opportunities may work well for you.
Before applying for a credit card, the first thing that comes to our mind is how much we will pay for it. If you are a high spender, you can always opt for a credit card with higher annual fee and enjoy the benefits that come with it.
On the other hand, if your objective is to get a basic credit card and are hesitant with your spending, you should opt for credit cards that probably come with low annual fees or credit cards with zero annual fee.