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8 Best credit cards with $0 annual fees – A complete guide

March 1, 2023 admin

No one likes to pay the annual fees of a credit card. People try their best to get away with not paying credit card fees. $0 annual fees credit cards offer some of the best rewards to the user with the perk of no annual fee.

Our list of some of the best credit cards with $0 annual fees

Rewards Credit Card – Chase Freedom Flex Credit Card
Travel Credit Card – Travel Rewards from Bank of America
Student Credit Card – CapitalOne SavorOne Rewards Card
Best Credit Card for People with Fair Credit – CapitalOne Platinum Mastercard
Secured Credit Card – DiscoverIt Secured Credit Card
Credit Cards with 0% APR offer – Citi Simplicity Credit Card
Credit Card for Rent Payments – Bilt Mastercard Credit Card
Business Credit Card – Business Advantage Customized Cash Rewards Credit card

Best Rewards Credit Card – Chase Freedom Flex Credit Card

Fees: Chase Freedom Flex credit cards charge $0 in joining and annual fees

Intro Rewards: This credit card offers a $200 bonus on a spend of $500 in the first three months of the card approval. It also offers a 0% introductory APR for 15 months on balance transfers and purchases.

Rewards: Freedom Flex offers 5% cash back on purchases from grocery stores, gas stations, and select online merchants. Further, it also offers 5% cash back on travel purchased through Chase Ultimate Rewards.

In a nutshell: Chase Freedom Flex Card offers excellent rewards on everyday purchases categories. For example, groceries, gas, and online merchants. Though, it also offers 5% cash back on travel through Chase Ultimate Rewards. This card also offers a 3% cash back on dining at restaurants and drugstore purchases. For all the other purchases, there is a cashback of 1%.

Cash back never expires on this card. This card also offers Zero Liability protection and purchase protection. Further, other additional offers and benefits are available from Mastercard.

Travel Rewards from Bank of America

Fees: $0 in Annual fees, a 3% fee on the balance transfer, and $0 foreign transaction fees

APR: 0% APR offers for 18 months

Rewards: Customers can earn 25,000 bonus points and a $250 travel or dining statement credit value. In order to, qualify for this offer they have to spend at least $1,000 in the first 3 months of opening the new card account.

In a nutshell: This credit card also offers excellent travel rewards with 3 points earned for every $2 spent on purchases. Customers get the flexibility to redeem points for a statement credit. They can also pay for travel and dining purchases made on the card through rewards. Further, there are no end dates of the points expiry on this card and there are no blackout dates.

Additionally, existing Bank of America customers receive higher bonus rewards. Bonus rewards depend on their Preferred Rewards tier with the Bank. For example, a preferred customer gets more points.

Best Credit Card for People with Fair Credit – CapitalOne Platinum Mastercard

Fees: This credit card is available with $0 in annual fees. It also offers $0 foreign transaction fees.

Joining Rewards: This credit card doesn’t offer any joining rewards.

Rewards: Mastercard offers $0 Fraud Liability if the card is either lost or stolen. Capital One has a tool to monitor the credit profile of a user. Card members get unlimited access to their credit score CreditWise from Capital One.

In a Nutshell: This is one of the best credit cards for members with Fair credit. This card automatically increases the credit limit of the user over time. They can consider increasing the credit limit starting in as little as 6 months.

CapitalOne takes into account payment history patterns to raise the limit. Finally, this is a great credit card for a starter person looking to build credit.

Capital One SavorOne Rewards for Students

Fees: This credit card charges no annual fee and no foreign transaction fee to their users.

Rewards: Card members earn unlimited 3% cash back on multiple categories. For example, the rewards are for dining, entertainment, popular streaming services, and at grocery stores. One-time $50 bonus on spend of $100 in first 3 months of card opening.

In a nutshell: Students from universities, community colleges, or other higher education institutions can apply for this card. This card helps students build their card history over time. Students receive a complimentary Uber One membership and 10% off on Uber and UberEats orders. They also receive unlimited 5% cash back on hotels and rental cars booked through Capital One Travel.

Best Secured Credit Card – DiscoverIt Secured Credit Card

Annual Fees: $0

Minimum Security: $200

In a nutshell: DiscoverIt Secured credit card requires a minimum $200 refundable deposit and offers the credit lines equivalent to the deposit. This card provides 2% cashback on fuel and restaurant and 1% cashback on other purchases. Discover also offers unlimited cashback matches for the first year.

Meanwhile, if a customer has a good payment history of six months, they release the deposit. This credit card also reports to the three major bureaus and helps build a credit score. This card offers one of the fastest six months upgrades to an unsecured credit card. Customers have to ensure a timely payment across their credit cards and on-time payment history.

Citi Simplicity Credit Card

Introduction Balance Transfer APR: 0% Intro APR for 21 months for balance transfers. Additionally, 0% intro APR for all new purchases for the first 12 months.

Regular APR after the Introductory period: Once the introductory period is over, a variable APR of 18.49% – 29.24% is charged. This APR will be on the creditworthiness of the customer.

Rewards: Citi Simplicity credit cards do not offer any rewards. This credit card is not meant to be a rewards credit card.

Fee: Citi simplicity credit card doesn’t charge any annual fees, late fees, or penalty fees.

Other Fees: Intro fees of 3% of balance transfer fees (least of $5) for the first 4 months of credit card account opening. After the Intro period, 5% of balance transfer fees (subject to $5). 3% of foreign transaction fees are applicable on foreign transactions.

Pros and Cons of this card: Citi Simplicity credit card is one of the best 0% APR credit cards. As this credit card offers a 0% introductory offer for all new purchases for 12 months. Customers can also use it for making big purchases. They can then pay the amount over a year.

Though this credit card does not offer any rewards, it offers the best balance transfer period of 21 months. Additionally, it offers 12 months of 0% introductory offer on new purchases.

Best Credit Card for Rent Payment – Bilt Mastercard Credit Card

Fees: This credit card charges $0 in Annual fees and foreign currency conversion fees

APR: 20.24% – 28.24% of variable APR

Rewards: BILT MasterCard lets the cardmembers earn points on paying rent. This card provides a 1% reward for paying the rent. This credit card does not charge any transaction fees. There is a limit to the total 50,000 points which members can earn from rent.

Pros of this Card: Bilt Mastercard offers 2x points on travel purchases. Card members earn points on flights, hotels, rental cars, and cruises. In order to qualify, the travel is to be booked directly with airlines, hotels, and car rental agencies.

The card also offers the members 3x points on dining. On the rest of the purchases, the card offers 1 point. All the expenses on the 1st day of every month offer double the rewards. Members get 6x points on dining, 4x on travel, and 2x on other purchases. Further, rent payments on the 1st do not qualify for this offer.

Bilt has been ranked as one of the most valuable reward points by Bankrate. It has been ranked above American Express cards and Chase Rewards cards.

Bilt offers up to $5,000 reimbursement for a non-refundable passenger fare. If for any covered reason the trip is interrupted or canceled. Bilt also offers reimbursement for expenses incurred on delayed trips over 6 hours. Covered reasons include Weather, aircraft breakdown, or air traffic control delays. In order to, qualify for this offer the card members need to book the entire trip on the Bilt Mastercard.

This card also offers Auto Rental Collision Damage waiver for any rental car charged on the card. BILT MasterCard offers better points as a rent or travel card.

Business Advantage Customized Cash Rewards credit card

Fees: This credit card charges $0 annual fees.

APR: Introductory 0% on purchases for the first 9 billing cycles. Once, the intro APR offer ends a Variable APR that’s currently 15.99% to 25.99% will apply.

Rewards: Card members earn a $300 statement credit after they make at least $3,000 in purchases in the first 90 days of the account opening.

Pros and Cons of this card: Firstly, credit card members earn 3% cash back in the category of their choice. For instance, gas stations, office supply stores, travel, TV/telecom & wireless, computer services, or business consulting services. Next, this card offers 2% cash back on dining purchases.

Card members earn unlimited 1% cash back on all other purchases. Customers can also earn up to 75% more cash back on every purchase. But to qualify they need to have a business checking account with Bank of America. They need to also qualify for the highest Preferred Rewards for Business tier for the best rewards available.

Credit Cards, Guides

Credit Card declined – Reasons and remedy to help you

February 25, 2023 admin

We all face a dilemma sometimes when our credit card declined in the middle of a transaction. This could be an embarrassing situation if you are using your credit card to purchase a service. Imagine having a great lunch at a restaurant and putting in your credit card for payment. The server informing that your credit card declined to pay.

A credit card may decline due to a number of reasons. In order to, avoid the heartache of handing over a credit card and facing a declined card, we recommend checking a few things beforehand. It’s always good to enable notifications from credit card providers. Also, enable the notification service from your mobile or cell phone to get a notification alert.

Credit cards may decline to pay in case of using an expired card, foreign transactions, large payments, and some cases incorrect data input.

Balance exhausted or Credit limit reached

The most common reason for a credit card to decline is overspending or shooting the credit limit. Every credit card comes with a credit limit, which is pre-set by the bank. Further, this credit limit defines how much a user can shop or use the card for a purchase. If a user hits the limit on his credit card. Consequently, if they try to purchase or use a credit card beyond this limit, the transaction will fail.

Do not spend too much money or have a large outstanding balance on the credit card. Always, keep your balance under the defined credit limit. If you need help managing credit card debt, do read our best tips to manage credit card debt.

Sometimes, you might have put an automatic payment like a utility bill or tax payment on your credit card. If that transaction hits your credit card, it may take 2-3 days to appear in the credit card summary. The credit limit immediately reduces to factor in the impending transaction. Further, if you hit the limit of the card and try to make any transaction the same may be declined.

Otherwise, if you have made a payment on a credit card to restore your balance, give at least 2-3 business days for the amount to settle in the credit card. Don’t expect that the balance will be immediately restored. Consequently, the balance of a credit card is increased only after making a payment.

The Credit card is expired leading to the card declined

Every credit card comes with an expiry date on the front of the card. Sometimes we might miss that a credit card has expired and may try to use it. An expired credit card will be declined.

Additionally, banks and credit card companies cancel expired cards. As the same is no longer valid in their systems, holding an expired credit card is like holding a piece of plastic.

Using credit cards outside the USA

New credit cards disable the option of foreign transactions by default. Before you can use a credit card for a foreign transaction, you have to enable the same. You can enable foreign transactions from the website or the mobile app of the bank. Alternatively, you can reach them over call to enable the same.

Secured credit cards or basic credit cards are not available for foreign transactions. These cards do not allow foreign transactions at all.

Card declined on making an unusually large purchase

Credit cards may decline a usually large purchase on your credit card. They may suspect a large sum on your credit card is a fraud or theft transaction and may decline the same.

Say you have a credit card with a $5,000 limit. Usually, you make small transactions (under $500) with this credit card. You did a large purchase of day $4,000 on your credit card. This unusually large transaction may flag off risk systems. The bank may decline this transaction.

The Credit card is not in use for a long time

If you are not a frequent credit card user or if you have multiple cards, you may not use a particular card for long. In such a case, the credit card company or the bank may restrict transactions on the bank. This is to prevent unauthorized use of the credit card.

If the bank has disabled the credit card, the easiest way is to call the bank or reach through other channels to activate the credit card.

Entering incorrect credit card details in case of an online transaction

Always check twice before hitting the Pay button in an online transaction. It’s very easy to fill in the credit card details incorrectly in the payment details while shopping online. Especially, if you are using a mobile device to make a payment, say on amazon.com or an airline website the credit card declined may be due to entering incorrect details more often.

Some credit cards have dual-factor authentication, wherein you may have to enter an OTP (or a one-time password). This OTP may be in a form of a numeric code sent to a cell phone or an email id. Always, double-check the details as well as the OTP.

Things to keep in mind to prevent the credit card declined

We all can be a little proactive and keep a close tab on our credit cards. This would help us navigate any payment trouble or card declined scenarios.

Keep a sufficient balance on the credit card

Always keep a sufficient balance or credit limit on your credit card. It is also a best practice to maintain a good credit score to keep the overall credit utilization ratio below 30%. Read more to know about some of the other factors which help to keep a good credit score.

If you are fully utilizing your credit card limits every month, it would be difficult to keep track and you may face a transaction decline due to credit limit.

Opt-in for notifications services for your credit card transactions. Credit card companies provide an option to send you reminders if you are hitting your credit limit or max allowed balance.

Manage your credit limit to keep your balance below the same

Do not overshoot the credit limit of your credit card. Ideally, keep the credit utilization ratio below 30%. This will help keep the credit score of the user healthy. High utilization of credit cards may put a dent in the credit score.

Also if you are making a usually large purchase on your credit cards, do inform the bank or card issuer beforehand. They will honor a valid transaction if it is within your credit limit. In case, you fear that you may shoot the limit. Do call them and request credit limit enhancement. Alternatively, make a part payment to restore your credit limit or balance.

Although, credit cards do allow increasing the credit limit temporarily. Enquire from your bank for the facility of over-the-credit limit access. Though, you may have to pay a one-time fee ranging from $35 – $49 to enhance this limit. Although, this credit limit does not get added to your overall credit limit. Your credit card will restore the original credit limit as soon as you pay off the bills.

Check beforehand doing international transactions

Enable foreign currency or international transactions before using your card internationally. Also if you have to make payments in foreign currency online, ensure that international transactions are available.

Customers can enable the foreign transaction from the issuer’s website or mobile app. Alternatively, they can also call the issuer bank for enabling foreign currency transactions.

Keep a note of the last date or expiry date of the card

Always note the credit card’s expiry date. Credit card companies or issuing banks will reach out to you before the card’s expiry date. Ensure that your contact details such as email address, home address, and mobile phone numbers are up to date. Normally, they will reach you through the number or email registered with them. If any is changed, do update them with the bank.

If you are not using a credit card. Another good practice is to cut the older physical credit cards. Cancel the older credit cards with the issuers.

Keep using your credit card

If you have lots of credit cards, keep rotating the cards and use other cards. Normally, people keep one primary credit card for transactions and one secondary credit card as backup.

A good practice is to cancel cards not used frequently. Additional credit cards do not add any value but may affect your overall credit score. To know the best practices to build a credit score.

Guides

Credit Card Fees – Complete guide to avoid pitfalls in 2023

February 23, 2023 admin

Credit cards are an important financial product nowadays for everyone. But they come with an associated cost in terms of applicable credit card fees. These are fees for operating and maintaining the credit card. As a credit card is a revolving credit line or a loan from a bank. If you do not pay the loan on time, there are applicable penalties or fees on the borrower.

As per the Consumer finance bureau, the USA has the highest outstanding balance of almost a trillion dollars. Further, Americans pay in excess of $120 billion every year in interest and fee charges to the credit card companies. More than 175 million customers have one or more credit cards.

Various kinds of Credit Card fees

Credit cards apply various types of fees. These could be genuine fees such as annual fees, foreign transaction charges, or such other charges. They may also apply other fees or interest charges on outstanding balances.

For example late payment fees, balance transfer fees, cash advance fees, and finally the APR. We delve into each of these fees and will also help our user to identify correctly what are applicable fees.

Credit card fees on Amex, Visa and Mastercard

Annual Percentage Rate (APR)

The Annual Percentage Rate refers to the interest rates applicable on a credit card. In layman’s terms, this is the interest the bank will levy on the balance on your credit card. If you have a credit card with an applicable APR of 22%, it means that any balance you carry past the due date will have this much interest.

APR could be of 3 types: fixed, variable, and introductory or promotional APR. In the fixed rates, your APR is likely to stay the same throughout the time you have your credit card. Variable rates may increase or decrease depending on the federal rates as well as the risk categorization of a borrower.

Promotional or Introductory rates include 0% or low-interest periods offered as introductory rates by credit card companies.

If you pay the amount in full by the last date, you will not be charged any APR or late fee. If you fail to pay or only pay the minimum due, the APR will start kicking in. As every month has different days, credit cards will multiply the average daily balance by the daily periodic rate.

To calculate, the daily periodic rate is to divide the APR by 365. This average rate is then multiplied by the outstanding balance. This daily periodic rate is applied to the daily outstanding balance.

Illustration of APR

For example, if you have a balance of $1,100 on your credit card on the 1st of the month. Or we can say you make a purchase on the 1st day of the month.

Say, the applicable APR on the card is 22%.

The applicable daily periodic rate is 22% / 365 = 0.060274%

Further, your last date of payment is the 28th of the month.

If you pay only a minimum of say ($100) and do not pay anything.

The applicable daily interest charged would be = $1,000 * 0.060274% = $ 0.6024 or only 60 cents a day.

Now, this is a fallacy as you might think that it is such a small amount. But the bank will compound the interest rate every day. They will also charge interest from the day the purchase was made.

Finally, the applicable interest would be = 28 * 0.6024 = $16.86

This might again seem like a small amount, but there are other fees also to consider with a credit card. Like the Late payment fees to be paid as well.

Late Payment Fees

Every time the cardmember delays the balance payments. They will have to pay a one-time fee. This is called late payment fees. Usually, this fee can range from $29 – $99 or even more for some credit cards.

Further, this late payment fee is in addition to the applicable APR on the loan. A late payment fee is a one-time fee for every late payment.

For example, if a card member delays payment six times in a year. Then, they will have to pay this late payment fee every time.

Annual Fees

Some credit cards also come with a fixed amount of annual fees. These annual fees can vary from $29 for a basic credit card and can go as high as $650 for a high-end credit card. Credit card companies levy annual charges to cover fees for providing additional services on cards. These are administrative charges for providing additional services on the credit card.

These additional and complimentary services can include –

Zero Liability protection
Purchase Protection
Additional Warranty
Access to credit score and credit history
Foreign conversion fees
Airport lounge access
Checked-in baggage
Contactless cards for on-tap support

Annual fees help credit card companies offset some of these frisbees. These offers attract customers but they are additional services. Someone has to pay for these services. An annual fee is one way to offset this cost. Some other credit card companies may also have high annual charges to limit the users. This makes their credit card more desirable.

Usually, the offers on the credit card will offset the annual charges. But, the user should be careful in selecting the right card. If they travel a lot a travel co-branded credit card, an airline co-branded credit card, or a hotel credit card may be best.

Balance Transfer Fees

Balance transfers are the facility to transfer the outstanding balance from one credit card or lender to a specific credit card. Members can transfer the balances up to their credit line on the credit card.

Credit card companies charge an amount or fee which is a percentage of the balance transfer. This could vary from card companies. Further, it makes sense to transfer the outstanding balance if the new credit either offers introductory or lower rates. Nonetheless, some banks do offer an introductory period with no balance transfer fees.

Read more about the best balance transfer credit card.

Foreign transaction fees

Foreign transaction charges or fees are applied to purchases made outside the USA. For example, if you are traveling and using your credit card for payments, an amount usually in the range of 3-5% is applied. If you are in the USA but using your credit card for online shopping from a website with a currency other than the US dollar. You will have to pay these fees in that case as well.

Finally, travel credit cards and some other high-end credit cards waive foreign transaction fees.

Cash Advance Fees

Credit cards also charge a one-time fee and interest fees on any cash advances. Cash advances are loans from a credit card. Cardmembers can use the credit card at any of the ATMs to withdraw cash.

Credit cards may also charge a one-time fee of $29 to $49 for any cash advance. The cash advances are treated as a loan. There would be an APR which would be charged on the cash advances. The applicable APR on cash advance fees is usually the highest category.

Over-the-limit fees

Credit cards have a credit limit assigned to them. The cardmembers can’t spend any amount over the credit limit. If they try to make a transaction over the credit limit, the transaction would be denied.

Credit card companies can give an option to the members to temporarily increase the credit limit for a fee. Hence, the name is over the limit fees.

Returned Payment Fees

If a card member has scheduled payments on their checking account for the credit card. If for any reason usually a low balance, a payment might be refused. This return payment fee is applicable in this case.

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