No Annual Fee vs. Credit Card 0 Cards

For the purposes of this article, credit card 0 means a card that has a 0% balance transfer rate, and credit card zero means a card that has no annual fee. It is important to understand straight away that these cards are for very different purposes, and your own personal circumstances should be the deciding factor as to which is right for you.

It is also important to know that this is not necessarily an either-or situation. The credit card industry is so keen to drum up business at the moment that it is possible to find a credit card that offers both a 0% balance transfer facility and no annual fee.

Credit card 0:

A credit card 0 is ideal for anyone who has a debt that needs transferring because their current rate of interest is too high. 0% periods are generally for six months, but longer offers can sometimes be found. These cards will usually carry an annual fee, and there will be a transfer fee involved as well, so you need to do your sums to work out whether it is financially worthwhile to make the application. You will need to consider the size of the debt and how you plan to handle repayments. If your intention is to try and shift the debt again at the end of the six months because you know you will not have settled it by then, you will have paid an annual fee for six months use, and you may then have to do the same again. In effect, you will have paid two annual fees for one year. Unless you then pay off the balance in full with this second credit card 0, you will have to do the same again, IF your credit rating will allow. If it doesn’t, your debt will start attracting the regular APR and there will be no way to shift it elsewhere.

Credit card zero:

A credit card zero is a card that does not charge an annual fee. It may come with a balance transfer option, but this could be in the region of 3% to 5% for six to twelve months. A credit card zero is great for anyone who does not use their credit card very much and/or who always pays their balance off in full. This is because a higher rate of interest is often charged by such cards on unpaid balances. If you do keep an unpaid balance on a regular basis, again some sums are needed to work out whether the higher rate of interest is worth the saving you make by not paying an annual fee.

The key to finding the perfect credit card is a thorough analysis of your own financial situation and spending habits, now and projected, and plenty of online research to locate the best deal. Remember that a credit card 0 and credit card zero are only two of the options available, and they are not always mutually exclusive.

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