Credit cards or no interest credit cards are used to acquire a valuable good such as furniture, a computer, a great trip, and thus pay little by little; or as a payment method to obtain rewards. However, usually, the rewards may include entrance by the annuity payment. In that case, you have no additional benefits. Credit cards with no annual fee work as a rotating quota assigned to you after a credit study and check that you meet all the characteristics to acquire a particular credit card. The facility comes once aspects such as income, credit history, and debt capacity go through a proper evaluation.
How Do Credit Cards Work?
Ever had a credit card or desire to start using one? It is likely because credit cards are financing instruments that offer us benefits such as flexibility in payments and immediate access to cash. Having a no-interest credit card involves several expenses, and knowing them will help you use it more responsibly.
Today, plastic money is becoming increasingly popular across the world. It is welcome in most commercial establishments of all categories: hotels, restaurants, travel agencies, so shopping becomes an experience without limits. This credit tool is an agreement between a financial institution (Bank or another type of company) and the borrower (the person who owns the credit that is you). It is through which a quota of money that is available for use through a credit card, whose subsequent monthly payment is subject to the expenses you make and the number of installments that you owe.
Know Some Costs And Conditions Of Your Credit Cards With No Annual Fee:
- Handling Fee
This fee is a charge made monthly or quarterly to the client for having the card and accessing all its benefits.
- Bank Fees
These charges are for the operations carried out when making use of the full range of products and services that the Bank provides. They can range from inquiries of financial movements, use the audio line, and everything related to withdrawing and transferring money by any means. It is essential to compare the costs of financial institutions since not all of them charge for the same concepts, nor do they have the same rates.
- Cash Advance
It is obtaining cash using your Credit Card. The amount of which is charged to your card. Banks charge a commission for this operation depending on the channel the customer use, (ATM, office, internet, or other). Most banks automatically defer the advance, and the interest rate may be different from other transactions.
- Protection – Insurability
Credit cards with no annual fee offer insurance to protect and give peace of mind to the client and his family in the event of death, permanent total disability, unemployment without cause, a victim of qualified theft, or forced use of the credit card, among others. For some of these insurances, the bank charges a fixed value every month, but others are included with the card and just by using it, you already have access to them.
What Is The Card Cycle?
- Credit
The Bank offers you a line of credit for a specific amount for you to use. When making purchases, the available balance decreases. For example, if space is $ 500 and you buy a $ 50 item with the card, the available balance reduction is to $ 450. When you pay the $ 50, your line of credit will return to $ 500.
- Purchases
You have the opportunity to use it to purchase goods and services that meet your wishes or needs.
- Payments
When the user swipes the card, the Bank sends the customer information about the purchases and the payment dates. Upon receipt, the consumer will corroborate the charges and make the corresponding payment, on the indicated dates. When you receive the account, you must pay at least the minimum balance.
Advantage Of Credit Cards With No Annual Fee:
- It saves you the need to carry cash.
- Consolidated accounts in one payment.
- You have access to benefits like mileage and point redemption programs.
- You receive special discounts in a large number of stores for making purchases with the card.
- You can make online purchases of goods and services nationally and internationally.
- It is more comfortable and more convenient than writing checks.