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Small Business CardsSummary:No annual fee credit cards can work well for a customer who has the right sort of spending profile. Three types of no annual fee credit cards exist and each can help or harm an individual's finances, depending on their use.
Nothing - well, almost - is free. The most important point to watch out for with any no annual fee credit card is determining if the card issuer has figured out a way to recompense the loss of the annual fee with inordinately high interest rates or other fees tucked away in the fine print. If you work it right, you could very well have a credit card that will cost you nothing except a little bit of care.
Featured No Annual Fee Credit Card
Pay no annual fee - for the first year- with the Westpac 55 Day Credit Card. Also enjoy a low rate on balance transfers and purchases.
- 0% p.a. for 5 months (reverts to 19.59%p.a.) on purchases
- 3.99% p.a. for 6 months on balance transfers
- $0 annual fee for the first year ($30 thereafter) annual fee
- 21.49% p.a. on cash advances
| Interest Rate (p.a.) | Balance Transfer Rate (p.a.) | Annual Fee | Cash Advance Rate (p.a.) | |||
|---|---|---|---|---|---|---|
 Westpac 55 Day Credit Card - Special Offer | Pay no annual fee for the first year and as long as you spend $10,000 or more on purchases. | 0% for 5 months (reverts to 19.59%) | 3.99% for 6 months | $0 annual fee for the first year ($30 thereafter) | 21.49% |   |
 Bankwest Zero Platinum MasterCard | Pay no annual fee but enjoy platinum services such as 24/7 concierge service. Awarded Best Transactor Credit Card 2010 by Money Magazine. | 0% for 6 months (reverts to 17.99%) | 4.99% for 9 months | $0 | 18.99% | |
 Woolworths Everyday Money Card | Earn 3 points for every $1 you spend and pay no annual fee for your first year. | 0% for 9 months (reverts to 19.84%) | 5.99% for 6 months | $49 | 21.34% | |
 Bankwest Zero MasterCard | Pay no annual fee and get up to 3 cardholders for free. | 0% for 6 months (reverts to 17.99%) | 4.99% for 9 months | $0 | 18.99% | |
 Bankwest Zero Gold MasterCard | Complimentary travel insurance and extended warranty on purchases - all with no annual fee. | 0% for 6 months (reverts to 17.99%) | 4.99% for 9 months | $0 | 18.99% | |
 American Express Gold Ascent Card | Bask in the prestige of the AMEX Gold Ascent, earn 1 Membership Rewards point for every $2 spent and pay no annual fee. | 0% for 6 months (reverts to 20.74%) | $0 | | ||
 Westpac 55 Day Gold Card | Pay no annual fee for the first year and enjoy complimentary insurance, purchase security and extended warranty. | 19.59% | 3.99% for 6 months | $0 Annual Fee for the first year ($90 thereafter) | 21.49% | |
 Westpac 55 Day Platinum Card | Offers everything Westpac 55 Day Gold Card offers plus 24/7 Platinum Concierge Service and other platinum benefits. | 1.9% for 12 months (reverts to 19.59%) | 3.99% for 6 months | $0 annual fee for the first year ($130 thereafter) | 21.49% | |
 Commonwealth Bank Low Fee Credit Card | Pay no annual fee if you spend more than $1000. | 1% for 5 months (reverts to 20.24%) | 5.99% for 5 months | $0 Annual Fee for the first year ($24 thereafter) | 21.74% | |
Your Spending Profile
No annual fee credit cards may seem like an enticing product, but you have to be a certain kind of spender to really benefit from their use. If your credit card spending habits include one or more of the following traits, you could be a good candidate for a no annual fee credit card. Do you -
- Tuck away your credit card and use it only for emergencies?
- Pay your entire balance every billing cycle?
- Carefully rely on short-term financing for large purchases?
- Find any sort of debt intolerable?
- Never charge enough on a card to take full advantage of a rewards card?
Even though you're endowed with these traits which may make you a perfect no annual fee credit card customer, there are still a number of things to consider before signing on the dotted line.
Three Kinds of No Annual Fee Credit Cards to Consider
A no annual fee credit card may seem to be a pretty simple option, but that's not exactly so. Three kinds exist and one may be better for you than the other as you start to examine your spending habits more closely. Consider:
- No annual fee for life. This sounds pretty good in that you make no annual fee payments for as long as the card is yours. But check the fine print to ensure the lender isn't reserving the right to charge a fee at a later date.
- No annual fee for the first year. The fee is waived for the first twelve months and then the usual fee kicks in. If you're inclined to take advantage of a card with more perks, this could be the answer. Consider that paying no fee for the first year could mean you're actually paying a smaller fee over a three year period.
- No annual fee as a special offer. This sort of offer is usually tendered when you have some other product with the bank or card issuer, often a linked checking account or a money market deal. Read the fine print here as well. Is the fee waived for the first year only or is it an ongoing thing?
Situations That Negate Any Savings
If you think any of the following possibilities could occur, you'll be doing yourself a favour by considering another sort of card, such as one with low interest or an introductory balance transfer offer.
- Cash advances. Just one cash advance can immediately negate any no-annual-fee savings. These usually incur an administrative fee. These are usually billed at the highest interest rate the issuer can charge without regard to any interest-free days.
- Unpaid balances and late fees. No-annual-fee credit card issuers usually offset the cost by charging higher interest rates. Carrying an unpaid balance for a month or two, or incurring any late payment fees, will wipe out any savings very quickly.
What to Look for in a No Annual Fee Credit Card
All no annual fee cards are not created equal. Since you're going to be shopping around for the best possible deal anyway, be on the qui vive for these benefits:
- Interest free days. Some no annual fee cards do not offer interest free days. These can slap on interest the minute a purchase is made. Avoid them. Look for a card that has 55 interest free days, especially if you plan on making a major purchase with an eye on your card being a vehicle for quick, no-interest financing. This will allow you enough time to get your purchase off the card balance without having to pay any interest.
- Low interest rates. This goes without saying. Always look for the lowest a.p.r. (annual percentage rate) you can find. You may be presently surprised to find a low interest, no annual fee credit card to suit you, if you search deeply enough. This could prove valuable just in case you do need to carry a balance for a month or two.
- Reward cards. Reward cards with no annual fees do exist. Especially if you do clear your balance every month, this could be a great opportunity to pick up a bit more value as a return on your spending. Some no annual fee credit cards can be found that even offer balance transfers at 0% for up to six months. Check the terms carefully though. Make sure that any new purchases aren't affected by the offer.
You Decide - Boon or Bane
Weighing the pro's and con's of various offers, weighing no fee against interest rates, weighing the fact that the credit card issuer wants to make money and you want to save money, can all seem like a bit of a hassle, even a silly game. A no annual fee credit card might not be the best choice for everyone. Used wisely as described above, they can offer some serious savings. It’s up to you to determine if a card with no annual fee is a potential boon or a potential bane.
Important Tip: Some folks use their no annual fee credit card for emergencies only. Don't keep the card in your wallet or your purse. Put it in a safe place. If you do lose your wallet or purse, you'll have an emergency backup until you get your lost financial instruments back in order.
