Looking for ways to cut down on your credit card charges? If yes, go for lifetime free credit cards. This category of cards comes with the regular benefits of a card while charging no annual fee on its usage. Does this mean that a lifetime free credit card does not involve any costs? No, it means that you do not have to pay the annual charge for using your credit cards. Other charges, however, do apply.
Such cards are issued by the banks as a reward to their customers who have deposited huge amounts in fixed deposits or have a good track record of using and paying off the due amount on their earlier cards. Waiver of annual fees is also used to attract new customers and expand their credit base.
In such cases, credit card issuers make income via other charges and by charging processing fees from the merchants who accept card payments. The eligibility conditions for a free credit card include a good credit score.
Costs and Charges Associated with a Free Lifetime Credit Card
The absence of annual charges does not mean that the cost of using your credit card is nil. Several other types of charges become applicable when you use your card. You should check about these charges when you apply for a credit card.
These charges include:
Interest Rates –
This refers to the interest charges that become applicable when you do not pay your credit card bill by the due date. The billing cycle for a credit card generally ranges between 25 to 31 days and your credit card statement is generated after that. You can avoid any kind of interest charges by paying your total bill amount by the due date.
Charges on Cash Withdrawals –
You have the option to withdraw cash against your credit card by paying a transaction fee plus an additional interest charge on the amount withdrawn. These cash advances attract interest from the date of withdrawal and not after the billing date.
Late Payment Charges –
These charges are levied when you pay your credit card bill amount after the due date.
Over limit Charges–
These charges are applicable when you use your credit card beyond your sanctioned limit.
Revolving Credit Charges–
These charges become applicable when you pay only the minimum amount due every month. The outstanding balance attracts interest charges which vary according to the duration for which the amount is outstanding.
Currency Conversion Fee–
If you use your credit card when travelling abroad you will be charged an additional currency conversion fee.
You can certainly reduce the costs associated with the best credit cards by sticking to due dates, paying the due amount in full, and not withdrawing cash. Other ways in which you can keep the cost of using your credit card minimum is by avoiding revolving credit or using a credit card abroad.
