Free Credit Cards Can Still Cost You (cont.)
Contributed by Victoria Knox
Keeping free credit cards as close to "free" as possible.
A healthy credit score is the best way stay eligible for free credit cards with no annual fee. Consumers with low credit scores are more of a risk for credit providers. For these customers, lenders tend to offer only cards that come with an annual fee. The fees helps protect the lender if some high risk customers don't pay their balances. Beware of lenders that charge "application" or "processing fees" just to apply for a card.
There are lenders such as Capital One and Providian that may offer cards if your credit rating is below average, without charging extra fees in addition to the annual fee.
Avoid penalty fees as well. Make your payments on time and don't go over your limit. Many lenders now provide online access to credit card statements. You can monitor your transactions and balance and even make payments online in a matter of minutes. Online payments tend to be fast and free. While some lenders offer the option to make a payment over the phone, there may be a hefty fee involved.
Finally, know your APR and intro rate period, if any, before you use a free credit card. If you can't easily find your APR on your statement, or your APR is variable, call the lender and check what your current rate is. Remember that variable rates can change when the Prime Rate changes. If you feel that your APR is too high, call the lender as ask them to lower it. If you are a good customer, the lender may accommodate you to keep your business. If that fails, you can shop around for a new card.
