If you’re in the market for a new credit card, chances are good that you’re looking for a card that will not only give you the spending power you need but one that will also save you money. A no annual fee credit card might be just what you’re looking for.

Some credit card companies charge you an annual fee just for the privilege of using their cards. This annual fee generally is deducted from your available credit just like a purchase would be. It’s then your responsibility to pay that fee when you receive your credit card statement. Trying to “finance” it by paying it off slowly might result in interest being charged. Not paying it off right away might also cause you to lose interest free days in the following statement period (as terms usually dictate your entire balance must be paid in full).

Annual fees can range from less than $50 to well over $200. Sometimes the credit card’s advertised annual fees include not only the card’s fee, but also a membership fee for the card’s rewards programme (such as a frequent flyer programme).

Where No Annual Fee Credit Cards Come In

A no annual fee credit card, like the Bankwest Zero Platinum credit card, is basically a credit card that doesn’t charge you one of these annual fees.

I can hear you thinking, “Great! I want one of those.” But before you rush out and apply for a no annual fee credit card, you need to understand that there are two different kinds:

1.    Cards that never charge an annual fee;
2.    Cards that waive the fee for only the first year, as an introductory offer.

Also, if the card is a rewards card, the “no annual fee” status advertised might be slightly misleading. For example, the card might not come with its own annual fee but you might have to pay an annual fee for access to the rewards programme. It’s important to read the fine print before applying just so you don’t run into any surprises on your credit card statement.

The American Express Gold Ascent card offers an example of this. While the card is technically a no annual fee credit card, if you choose their “Boost my points (A)” option when you fill out the credit card application you’ll have to pay an $80 annual rewards programme membership fee.

Another thing to keep in mind when it comes specifically to no annual fee frequent flyer cards is that you’ll have to be a member of the airline’s frequent flyer programme to redeem your points. Those frequent flyer programmes might have their own joining fee or annual fee.

These warnings are in no way meant to dissuade you from seeking a no annual fee credit card. Many no annual fee cards are just that — you won’t be charged an annual fee of any kind. We just want to make sure you understand that there are different kinds of no annual fee credit cards being advertised, so you know what terms to consider while comparing them.