Best No Frills Credit Card

August 9th, 2010

When you can choose from a huge range of credit cards all touting their various offers and benefits, why would you opt for garden variety “no frills credit cards”?

At one time all credit cards were pretty basic, but now with the number of competing providers, it’s as if they are all trying to outdo each other with enticing offers to win your business. But no matter what glitz is on offer it’s still worth looking at the no frills credit cards if all you really need is a good basic card without paying a fortune for the privilege. Even with no frills card you still have choices.

Type of no frills cards

1. Low or no annual fee

If you only use your credit card on the odd occasion or for emergencies, then paying an annual fee just becomes an extra cost for you to absorb. If you are not using your card too often then you won’t be earning much in the way of rewards points, so is it worth paying a fee for a points value that equates to less than the cost of your annual fee? When you have a no frills credit card with no annual fee, yes, you will probably lose the reward point offers but you gain the savings from not having to pay the fee.

2. Low interest rates

Reward schemes are arrangements between credit card providers and certain retailers and airlines. You earn points per dollar spent and in return can exchange those points for goods or services with the associated companies. There is a charge from the retailer to the credit provider for provision of these services, which is in turn reflected in high interest rates for the card user. Because a no frills card doesn’t have any of these “frills” they are able to keep their interest rates much lower.

Now whilst the interest rate factor may not concern the customer who pays their balance in full each month and doesn’t have any interest charged, its useful to know that, if you needed to make that unexpected large purchase, and couldn’t pay straight away that the interest would not get out of hand.

3. Avoid temptation

Reward schemes are all very well if you genuinely get benefits, but they have a downside in often tempting you to spend more than you can afford because you are chasing those elusive points.

When you have a no frills credit card that temptation is safely removed, so it’s easier to concentrate on using your card only when you really need to. It wasn’t unusual at one stage for people to want a gold or platinum card simply for the implied status that came with those cards. But do you really want to pay for a status symbol that doesn’t give you any real benefit?

Basic no frills credit cards are about providing you with a simple card to cover basic needs and without costing you a fortune for the privilege. The low interest means it’s not going to break the bank nor is it going to be costing you a fortune in fees and charges.

Editors Choice: Featured Credit Card Deals

	Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)