Credit card companies need to make money just like everyone else. If they couldn’t make money by extending credit, they wouldn’t be in business, and that would force us to pay cash for everything from coffee to vacations. There is obviously a place for credit cards in our society. However, some tricks that credit card companies use to make money can only by classified as sneaky.
This is the first in a four-part series on the hidden cost of credit cards.
Some cards carry annual fees. This isn’t new, but it’s also not necessary. It’s also no announced in big neon letters when you sign up for a new card. Sure, it’s in the fine print, but for all we know so is War and Peace! It’s nearly impossible to get through all the legalspeak. Almost every major card vendor offers at least one card that does not charge an annual fee. You may get better rewards, like cash back or airline miles, on a card that charges you 50 bucks a year, but really, are the benefits on that card 50 bucks better than the no-fee card? I have two no-fee cards. One gives me 1% cash back on every purchase and the other gives me airline miles. Those seem like pretty good benefits to me, and I don’t even have to pay for them. You can research a no-annual-fee card on your current card vendor’s website. If they do offer a no-annual-fee card, often you can roll your existing balance over to the new card.