Credit Cards and their Fees
There are 4 types of fees which are paid by the consumers for using the credit card.
- The APR or annual percentage rate or interest rate is charged upon the number of transactions that take place in a single credit card processing and billing cycle. The APR can be either floating or fixed.
- The second very important fee is the commission. The establishment where you conduct the transaction, is charged with a fee of about 1 to 3% of the total value of transactions; this amount is recovered by the establishment from you, sometimes in full and sometimes partially.
- Being a customer of the company, you will have to pay, what is known as an annual membership fee which is usually used to maintain the infrastructure of the credit card provider. In some cases this fee is collected on a monthly basis.
- There are some miscellaneous fees that are levied, but their existence differ from company to company. Such fees include, activation fees, set up fees, balance transfer fees, late payment fees, credit card cash advance fees, credit limit increase fees, etc. In the no fee credit cards, many of these fees are excluded.
Features of No Fees Credit Cards
These credit cards are for people who have bad credit scores. The term 'bad credit' refers to credit ratings that fall below 619 as per FICO credit score range. As per the VANTAGE score, it would be below the D category. These are some requisites that would be demanded by the credit cards companies.
As an applicant you will have to be employed or have a steady income to get the card. The company would naturally keep the credit limit lower than the monthly income and within a good debt to income ratio. Now there are two possibilities for the credit rating requisites, the first one being the no credit check where the credit card company does not take into account the credit rating and the second type is the one where the credit card program is tailored as per the requirements of the bad credit rating. The credit cards for bad credit with no fees principally have a bit high APR, and a compulsory deposit, which is equivalent to the credit limit. The deposit acts as a security for the card.
No Deposit Cards
No fees or deposit credit cards are very rare and hard to find. In some cases these cards are also secured credit cards. The credit limit is also pretty low and there are some translational restrictions that may be imposed. The credit cards for bad credit with no deposit and no fees is usually given to people with assured income projection. These cards are available to any person with a reasonable income.
The basic conclusion is, if you plan to spend a basic recurring sum of money with the help of this card, on a monthly basis, then the no fees cards will do you good, as you will have to pay only the start up fee and the APR, late payment fees in some cases. Indirectly, you will save a handsome sum of money, but be warned the credit limit is not very high. You can check out the Green Dot PrePaid MasterCard which I just came across, or the First PREMIER Bank Classic Credit Card or even the AccountNow Prepaid MasterCard. You may also search the websites of CitiGroup, VISA, MasterCard and American Express for better credit card offers leads.