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The Real Reason Behind Free Credit Card | free credit card

A free credit card with no annual fees, month-to-month fees or even one-time membership charges is an enticing offer. Some free credit cards have zero percent introductory interest rates, balance transfers fees and free foreign transaction fees for the first six months. Even people with bad credit can often get a free credit card, provided that they're willing to put down a reasonable deposit.

There are many reasons why interest is charged on credit cards: to prevent abuse of the system, to cover expenses and maintain quality service, and even to make up for the fact that credit companies don't make much money on interest. All of these things can lead to more fees being added, which is just a reflection of the ever-increasing costs of doing business. For example, it costs money to process checks and paper money. Fees for ATM usage can eat away at your bank account, too. Balance transfer fees add up to significant amounts. You may think that signing up for a free credit card sounds like a deal–but you'd be surprised at how many of them have hidden fees that you won't be aware of until you're late for a payment and your credit score drops significantly.

Before you apply for any free credit cards, make sure to do your homework and consider all the options. Most major credit cards now come with a variety of fees. They might seem pretty affordable at first glance, but they can often rack up a lot of extra charges in the long run. There are ways to avoid paying for a bunch of extraneous services when you apply for a card, such as comparing offers. However, you should be aware of all the fees associated with your new credit cards.

The most popular type of fee that you will encounter with free credit cards is an annual fee. Most people pay a large annual fee each year, which is designed to offset the cost of providing you with credit. Most people also will be hit with a statement balance fee each year. The statement balance fee is figured into the amount you pay off your credit card each month, depending on how many interest points are present on your balance. Interest rates are at record lows right now, so this isn't likely to change anytime in the near future.

Annual fee credit cards come with a grace period after which the interest rate is tacked on to your balance every month. Most companies provide you with a grace period of two months after your introductory rate expires before increasing your rate. However, some interest rate cards only charge a small annual fee if the interest rate is then immediately increased. After your grace period, these same cards will then tack on an additional interest rate.

Many people enjoy receiving free credit card offers because they will get perks that are unrelated to their credit card issuer or the brand of product that they are purchasing. For example, many gas stations offer free gasoline when you use their pumps for one full purchase at the pumps in their establishment. Most major retailers give shoppers a variety of free products when they use their checkout system at their store. Or, you might receive free diapers or grooming items when you visit their establishments. Free coupons are also often provided by U.S. supermarkets.

Some lenders offer free credit cards that feature a zero percent balance transfer balance. Balance transfers happen when you make a monthly, quarterly, or semi-annual payment for a full year on your account. During the introductory period, these zero percent balances remain free until you decide to transfer your balance to another zero percent balance transfer card. After the introductory period is over, however, these zero percent balances start to accumulate interest.

Some lenders offer free balance transfers with statement balance transfers as well. Balance transfers are among the easiest ways to reduce your credit card debt, but it's not advisable to transfer more than $1000 worth of debt to your new card. This will only reduce your available credit and will result in extra fees each month until the balance transfer fee is repaid. It's a good idea to keep all your available credit at all times, so that you don't have to choose between paying bills and making payments on time. Your overall financial situation will determine how and when you choose to use your new card.


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