It may be relatively easy or quite difficult to get a no-annual-fee credit card. Since the late 2000s it has gotten increasingly difficult for most people to obtain credit cards unless they have very good to perfect credit. Though there are still some cards available for those with poor credit, lenders in this area of the credit market have decreased in number and banks or other lending agencies are ever more cautious about loaning money to people who might present any kind of pay back risk.
In general, there have always been quite a few credit companies that offer a no-annual-fee credit card. They tended to offer these to consumers with good or better credit scores. Credit cards that charged a fee were typically associated with people with lower scores, and they might not only charge an annual fee but could stack their offers with activation fees and very minimal credit lines that might be used up by the time all initiation and yearly fees were paid.
The financial crisis in the late 2000s means that most people cannot expect to get a no-annual-fee credit card if their score is not superlative. A good credit card score in the late 2000s is 720, but many people may be able to find a no-annual-fee credit card if they are in the high 600s. These numbers are flexible and may be subject to change based on current economic conditions and lender response to them.
The credit score is not only an assessment of how well people pay bills on time but also includes how high debt to income ratio is. If a person already has a couple of credit cards that are nearly maxed out and pays the bills on time, he still may have a lower score since he’s utilizing a higher percentage of available debt. This could make it hard to get another bank to offer more credit without charging a fee or high interest.
Today, the smart consumer wants to look at annual fee, but that is not the only consideration. Another important one is interest rates, since these may represent more per year spending than a small annual fee does. If credit score is reasonably good, borrowers need also to compare interest rates, to see if a no-annual-fee credit card is actually the best way to go. If the no-fee card has a much higher interest rate, and people expect to keep a balance on their card at all times, it may be worthwhile to pay a small annual fee in order to avoid paying higher interest. On the other hand, the fee makes little sense when the person never keeps a balance on a card, and higher interest rates can be preferable because they won’t affect the person who pays off all charges every month.
When people can’t get credit, even with high fees and high interest rates, they may still be very interested in having a card that functions like a credit card. Most ATM or debit cards can be used in the majority of places credit cards are used. The money comes right out of a person’s bank account, but it still gives the convenience of not having to carry cash. There are plenty of banks that offer free checking accounts for people who use electronic deposit of their paycheck. These are well worth looking for since they may be a good substitute for a no-annual-fee credit card.
