No Annual Fee Cards vs. Low Interest Credit Cards
Posted July 2nd, 2010 and last modified December 29th, 2011When selecting a credit card, you need to consider how the features offered with them would work, in terms of saving you money.
You need to decide whether a card with a low interest rate or one with a minimal annual fee will be of more benefit to you. Working out which card is right for you usually comes down to your spending habits when using your card, so you need to weigh up the benefits of low interest vs no card fee credit cards.
Low Annual Fee and a Special Balance Transfer Rate
Don’t worry, be a happy cardholder of an ANZ Low Rate MasterCard because it gives you unbelievable low offers on balance transfers, purchases and annual fee. You can even have up to additional cardholders for free!
- $58 annual fee
- 0% p.a. for 3 months (reverts to 13.24% p.a.) on purchases
- 0% p.a. for 3 months on balance transfers
- Cash Advance Rate of 21.49% p.a.
- 55 days interest free
- Minimum Income Requirement of $15,000 p.a.
- Up to 55 days interest free on purchases
Read the ANZ Low Rate MasterCard – Balance Transfer terms and conditions.
No Annual Fee – ever!
The HSBC Credit Card is one of those cards that you thought couldn’t exist, but it does. It packs a real punch – $0 annual fee, for the life of the card, is a major benefit, combined with the competitive balance transfer offer. If you are looking for a card that could literally cost you nothing (assuming you pay your credit card back within the interest free period) the HSBC Credit Card is well worth considering.
- $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.
People that struggle to make regular payments on the credit card, may find it more useful to have a low interest credit card. This means if you are taking longer to reduce the balance, your interest won’t be excessively high. Another benefit of low interest cards is that they usually include an interest free period, which gives you a bit longer to pay for your purchase without worrying about accumulating interest.
When you need to make a larger than normal purchase, for example an item costing perhaps $2,000, that is beyond your budget to pay within the interest free period, you have the peace of mind in knowing the interest will be at a lower rate than other types of credit cards.
If you know that you aren’t going to be able to pay your balance in full each month, it might be worthwhile considering the low annual fee card. These cards, although having the annual fee cost, do tend to offer a very low rate interest, so overall you would be making a saving if you are making your payments over a prolonged period of time.
No annual fee credit cards are a better alternative for people that enjoy the convenience of having a credit card, but either don’t use it frequently or they are in a position to pay off their accounts in full each month. It’s useful to know you have a credit card available if you want to do some online shopping or need to access some funds in a hurry or unexpectedly.
But there is no gain in having a low interest card, if you intend to pay your account by the due date. Consequently, it would be of more benefit for people in this position to have a no annual fee card, as they aren’t getting the advantages of a low interest one. This is where the choice between a low interest vs no card fee, should be a no annual fee card.
Knowing you can access money in an emergency always gives peace of mind, and you don’t have to worry about unforeseen costs catching you out. But, there is no point to having a card if you don’t utilise the one which most benefits your circumstances.
The deciding factor on which card you should select will be whether you will have an ongoing balance each month or whether you will pay it in full. So based on that criteria it should simplify your selection of card between a low interest vs no card fee.
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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 |
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