Given the numerous credit cards choices available today it’s often difficult to know exactly which is the right card for you, and what benefits do no frills credit cards give you?
As credit card companies have become more competitive they have tried to make their cards more enticing to potential customers. So why would you choose a basic, no frills card?
What do No Frills Credit Cards have to offer:
1. In most cases a zero or low annual fee
For those who don’t use their credit cards very often, having to pay an annual fee is only more money out of your pocket. If you only use your card occasionally then you won’t gain many rewards points, and do you really want the gift you are paying those annual fees for?
With no frills credit cards you have extra money in your pocket because you are not locked into a reward scheme. Often you will find that reward schemes can have extra fees of their own.
2. A lower interest rate
Most reward schemes consist of arrangements between your credit card provider and a number of retailers and marketing companies who make available certain products in return for your points. Your credit card company is charged for this service and this is passed on to your interest rate. By having no frills credit cards there are no extra fees, consequently your interest rate is lower.
If you pay in full each month this may not concern you, as you don’t incur any interest, but the option is left open if you want to make a large purchase in the future and need to make a smaller payment that month.
3. Cuts back on temptation
It’s all too easy to get into spending mode with your credit card when you are trying to accrue extra points. Sometimes you can get more focused on building points than worrying about what you are spending. A basic card removes the temptation to overspend.
A no frills card can be used when it is really needed. Not to waste your money on things you don’t need. Your credit card should be your safety valve for when you run out of cash shopping or you need something urgently and haven’t got the immediate funds available.
Whichever way you use your card you can be confident of a lower interest. Of course, if you don’t use your card there won’t be any unexpected fees. In summary, a no frills credit card can have hidden surprises; you may get a pleasant surprise.
