If you had to choose a specific type of credit card that would be the most beneficial to you, which would it be? A rewards card? A low interest credit card? How about a no annual fee credit card? Let’s talk more about that last option.

We can’t say what type of credit card would be best for you, because that will vary for every applicant. Let’s explore no annual fee credit cards though, sharing some benefits of these cards that might be worth considering when you make your choice.

3 Benefits of No Annual Fee Credit Cards

Here are a few reasons you might want to make a no annual fee card like the HSBC credit card the next credit card in your wallet:

1. You save money up front. Rather than waiting for your benefit like you would with a rewards card offering cash back, you don’t overspend in the first place. That’s more money in your pocket from day one — money you can spend, save, or invest in any way you please.

When you pay an annual fee, you start each year already “in the hole,” owing your credit card company money. You don’t have to put up with that. No annual fee credit cards give you another option.

2. Even better than just saving money compared to other cards, a no annual fee credit card could basically give you free money. This only works if you pay your balance off in full every month, don’t use cash advances, don’t do a balance transfer, and don’t have a rewards card that includes a rewards programme membership fee.

A no frills, no annual fee credit card would be ideal for this. You won’t pay any up front annual fee. If you pay your bill in full each statement period, you might also be able to avoid interest on all of your purchases too! That’s basically interest-free and fee-free spending! If you get a cash advance or transfer a balance to the card though you’ll probably be charged interest right away, and you’ll forfeit interest free days on purchases until your balance transfer is paid off in full.

3. You might get cheaper rewards. If you’re able to find a no annual fee rewards credit card, you essentially get more value out of those rewards points. Think of it this way. You could pay a $150 annual fee and take two years to earn enough frequent flyer points for a $600 airfare if you’re not a particularly big spender (meaning you really only got $300 out of the deal). Or you could earn your points towards that plane ticket with no annual fee cutting into the overall value you get. You have to look at both costs and returns to find out what you’re really getting out of your credit card.

A no annual fee credit card might not be the best choice for everyone, but if you use it to your advantage as described above, you might be able to enjoy some serious savings!