Free Credit Cards – Compare & Apply for $0 Fee & Interest Free Credit Card
Posted August 9th, 2010 and last modified February 7th, 2012Credit cannot be free can it? Isn’t the whole point of credit products is to make money for the banks and financial institutions that offer them?
Well, yes that is the point, and most of the time credit is not free. However, with the right type of fee free credit card, it is possible to have what is effectively a free credit card, either for a certain period of time, or in the form of a $0 annual fee credit card
To understand the concept of free credit cards we should first be sure that we full understand the word ‘credit’ and how it works in the context of credit cards.
Interest free purchases for up to 5 years at over 1000 participating retailers in Australia
The HSBC Credit Card is a unique credit card and one of the most competitive offers currently available in Australia. It offers a $0 annual fee for the life of the card, and a cracker of a balance transfer offer as well.
- $0 annual fee
- 17.99% p.a. on purchases
- 0% p.a. for 6 months with 2% handling fee on balance transfers
- Cash Advance Rate of 21.99% p.a.
- 55 days interest free
- Minimum Income Requirement of $20,000 p.a.
What is Credit?
Credit is a terms used to describe the act of borrowing. If someone gives you something in exchange for the promise that you will pay them back, they are offering you credit. In banking terms, when banks lend you money they do not do it out of the goodness of their hearts. They are doing it to make money.
The way banks make money from lending money is from interest. When they lend money they do it over a set period of time, and at monthly or annual intervals they charge you interest.
Interest is normally a percentage of what you have borrowed which is then added to the total amount that you owe. As a simple example, if you borrow $1000 and the annual interest rate is 10%, the over a year you would pay $100 in interest.
So now you owe the bank the original $1000 you borrowed plus $100 in interest which is the bank’s profit from the deal.
There are different interest rates, and terms depending on the type of financial or credit product you have taken out.
Interest, Credit Cards, and Interest Free Credit Cards
So how does interest work in conjunction with credit cards, and why does it seem so easy for people to get in so much debt with them?
The difference between credit cards and other kinds of credit products is that the credit card is classed as rolling debt. With credit products such as a personal loan or home loan, it is usual for the credit to be offered over a fixed period of time, with a fixed or slightly variable rate of interest, and this means most the time people know what they will have to pay back.
With rolling debt, the balance owed can increase and decrease as you spend. Interest is charged based on what is owed and so because of the up and down nature of the credit, what you will pay in interest is more unpredictable.
However, because of the fierce competition between the banks for our custom, they have had to offer products that are more attractive to consumers than standard credit cards. This has led to the creation of a line of products that if used correctly can offer you the rare opportunity of free credit!
Introducing the interest free balance transfer credit card, and the no annual fee credit card!
Free Balance Transfer Credit Card
So how does the interest free balance transfer credit card work, and why can we say it is free?
In order to attract new business the credit card companies created the interest free credit cards that targeted new customers who has existing credit card debts. What these cards offer is a special 0% rate of interest for a set period of time.
What this means is that for however long your special promotional period is you will pay absolutely no interest whatsoever. This gives you the time and freedom to pay your debt off without interest increasing your overall balance each month.
The most common types of free balance transfer credit cards have interest free periods of anywhere between 6-12 months.
Traps
As great as these free credit cards can be, there are certain things that you need to be careful of before you get involved with an offer.
- Check the interest rate - There are some balance transfer offers that have a low rate of interest rater than a 0% rate of interest. Whilst these can still save you money they cannot really be classed as free.
- How long is the promotional period - Your card will only remain interest free whilst you are in the promotional period. After this you will revert to the standard rate of interest which can be very high in some cases.
- For this reason you need to ensure that you either pay off the debt in full before the end of the 0% period, or to transfer whatever is left of the balance over to another interest free credit card.
- Do not spend! – This is probably the most important things to pay attention to if you are going to stay interest free. Your 0% rate only applies to your transferred balance. Unless you have a special 0% rate on purchases, any new spends made on the card will be subject to the standard (higher) rate of interest.
- Check for fees – Although the card may have the appearance of being free because of the 0% rate of interest, the card provider may make their money in other charges or costs hidden within the terms. Have a look for any late fees, management fees and annual fees.
In fact that brings us nicely to our next type of "free credit card", the fee free credit card!
Free $0 Annual Fee Credit Card
So how does this type of credit card save us money? Many credit card companies charge us an annual fee for using their service.
Normally the size of the annual fee reflects the level of service received with the card, along with the amount of benefits and perks cardholders have access to. In other words as a general rule, the more basic the credit card the lower the annual fee.
However, another way the banks have tried to lure us in is with credit cards that do not charge any annual fee, and these are the no annual fee credit cards.
Effectively with these credit cards, if you were to pay off your balance in full each month, and do not rack up any interest charges, then you would not actually be paying anything at all for using the card.
It is possible to find card providers that offer both an interest free balance transfer credit card, that is also a fee free credit card. These deals are out there, and with a little digging and comparing of deals you could easily net yourself a real bargain.
So Where Can I Get a Free Credit Card?
If you are looking for a quick, and efficient way to apply for one of these cards then we recommend applying over the Internet.
Most applications only take around 10-15 minutes to complete, and it is becoming very common indeed to receive an instant answer to your application.
The main details you will need to hand are:
- Name
- Date of birth
- Telephone numbers
- Current address
- Previous address
- Work address
- Income details
- Details of all your outgoings
- Some form of ID-Passport, drivers license etc.
- Details of any other credit you may have
If you prepare these details in advance of your application for a free credit card offer then you will save yourself a lot of time.
Once you have filled out all your details the lender will then normally run a credit check on you. This is to check your suitability as a credit customer. Because of the mistakes that can easily occur on one’s credit file it is advisable to check your credit score first, that way you can spot any errors and get them corrected, so they do not adversely affect your credit card application.
Be Sure to Compare
There are many great free credit card offers on the market, and some will suit you better than others. For this reason instead of jumping at the first interest free credit card that comes your way, have a look at all of the features and benefits.
Although it can be very difficult to find a credit card that will fulfil every one of your needs, it is possible to find one that will save you a greater amount of money if you base your decision on your personal financial situation.
A Word of Caution
Although with fee free credit card offers, and interest free balance transfer credit cards you are effectively being given a form of free credit (if you follow the rules), you must remember that any type of credit card can get you into real debt problems if you are not careful.
These credit cards can save you money if you use them in the correct way. This means not overspending, making sure you pay off your balance in full each month, not missing payments, and ensuring that you do not spend above your agreed credit limit.
Credit cards do not offer you free money, and the money you do borrow has to be paid back. What these special free credit card offers give you is the opportunity to only ever have to pay back the exact money that you borrow.
That means no interest payments, and no annual fees ever! As long as you are fully aware of all promotional periods, and are fully versed in all the terms and conditions of whatever card you buy, then you should be fairly safe.
Remember that if you are not certain about a certain product be sure to ask the lender. It is in their best interest to make sure you fully understand a product before you sign. There are also independent places on the Internet where you can get up to date advice on all the latest credit card offers.
Check out today's featured offers:
| Westpac Low Rate | Citibank Clear Platinum | Qantas AMEX Discovery | ANZ Platinum |
 |
 |
 |
 |
0% p.a. for 6 months on purchases & balance transfers |
2.9% p.a. for 12 months |
$0 annual fee Up to 10,000 Bonus QFF Points |
0% p.a. for 6 months on purchases & balance transfers |
|
|
|
|
Subscribe to our newsletter and get "The Ultimate Guide to Balance Transfers"
If You Like This Post...
Get all the latest deals, guides and loopholes go in Credit Card Finder's free bi-monthly email. Don't miss out - join the thousands who get it emailed!
Ask A Question