No Annual Fee vs. Waived Annual Fee Credit Cards

Credit card providers commonly charge annual fees just for having an account. Many, however, may offer credit cards with no annual fee or even opportunities to waive the annual fee for the first year.

If you're in the process of searching for a new card, it's important to understand the difference between these options, so you can get the most out of your card and make the best choice for your wallet.

Here's what you need to know.

Why choose a no annual fee credit card?

If you don't want to incur an extra yearly charge for having a credit card account, you might choose a card with no annual fee. The flipside is that you may miss out on helpful rewards and perks. That's because many cards that charge an annual fee do so because they come with hefty benefits, such as points or miles.

If you can find a card with rewards that outweigh the annual fee, then it might make sense to just pay the fee in exchange for those benefits. If the rewards don't justify the fee, however, then it might not be worth it to pay that yearly charge. Your annual fee may be $400, for example, but you know you'll only use $200 worth of rewards points in a year.

Why choose a waived annual fee credit card?

Even if you choose a card with an annual fee, you may be able to get the fee waived for the first year. The biggest reason to do this is, of course, to save money. Another reason, however, is to give yourself more time to see if the rewards of the card outweigh this annual charge.

After a year with the card, you can decide whether it makes sense to keep your account open or to choose another card with either no annual fee or better benefits.

How do you get an annual credit card fee waived?

It's possible to get an annual credit card fee waived, but it may take a bit of leg work. You can use these tips when asking your credit card provider forego your fee for the first year:

  • Call the customer service number for your provider and ask upfront.
  • Find out if there are certain conditions under which they would waive the fee, such as after a certain amount of credit card usage. If you're preparing to make a large purchase, this might be helpful.
  • Negotiate by asking your provider to match a comparable offer with no annual fee from another company.

Remember to always be respectful and communicate clearly. Chances are, the company wants your business and to keep you as a cardholder. Work with a representative to try and find the best solution for your financial needs.

Source: iQuanti, Inc.


Categories: Personal and Family Finances

Tags: annual fees, credit cards, financial services, personal finance