In this day and age, thousands of advertisements can bombard the average consumers almost every day. The majority of these ads arrive in the form of unsolicited email and bulk postal mail for credit cards. Each of these advertisements has something to attract potential consumers. They may offer staggeringly low introductory interest rates, no annual fee credit cards and all manner of possible rewards and incentives. A consumer may find it difficult to cut through all of the advertising jargon and determine the best credit card.
Things would be a lot easier if there is a simple cut and dried algorithm for selecting a few good prospects out of the myriad of offers for travel rewards cards, no annual fee credit cards, low interest credit cards, and the other kinds of credit cards. A consumer may be able to determine the best card offer through careful examination of his or her spending habits along with a little bit of calculation.
Credit card companies issue credit cards with the sole purpose of making money through finance charges and/or annual fees. This means that no annual fee credit cards usually have higher interest rates than cards that charge an annual fee. You should consider how you typically use your credit cards to determine if you can benefit from no annual fee credit cards.
You can usually benefit more from no annual fee credit cards if you always pay off your balances in full, or carry very little balance. This is because no annual fee credit cards tend to offset the savings from having no annual fee by charging higher interest rates than other cards. Remember that your finance charges will be low, regardless of interest rate if you always keep your balance low.
The interest rate will become much more of a factor, if you often carry large balances and do not pay your balance in full. No annual fee credit cards may not be the best choice if this is how you handle your credit card account. In your situation, the best card may be the card with the lowest interest rate because the savings you will get from paying lower finance charges will offset the annual fee that you will be required to pay.
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