Consumers’ needs and demands are constantly growing. That is why, for example, we have more and more labels on meat packaging, for example, about ethics, and banks are rushing to develop different mobile wallets. Credit cards also show the trend, as almost everyone already has, for example, the ability to make a payment.

However, most of us choose a credit card based on price, for example, by comparing annual fees.

But how to choose a credit card when you know that an annual fee card may have a higher interest rate than an annual fee card. Which is cheaper for you?

An annual or annual fee credit card?

An annual or annual fee credit card?

We compared the cost of credit cards with annual fees and those with no charge to find out the most advantageous option for the consumer.

The comparison uses a basic credit card from a few different credit providers with an annual fee of between $ 0 and $ 60. As an example, two different loan amounts with a 12-month payment period are used for comparison.

In the first example, a credit card purchases a product worth $ 500.

In another example, a credit card purchases a product worth $ 2,000.

Loan costs from lowest to highest

The comparison takes into account the credit card’s annual fee, billing fee and credit interest.

How did your credit card rank in the comparison? What is the interest rate or annual fee on your credit card? You can easily compare different credit cards from our credit card comparison:

From here to credit card comparison! Quickly compare card rates and annual fees!

Big differences in costs

Big differences in costs

The comparison shows that there can be a yearly difference of almost $ 80 in the cost of a credit card with no charge and no charge, and even if the credit card’s annual fee is added, the difference is even steeper.

Correspondingly, the annual Good Finance Credit card offers the most expensive credit in the comparison for a EUR 500 credit. The annual fee-free Norwegian credit card offers the second-lowest credit in the $ 500 example, but the most expensive credit in the $ 2000 example, where the difference with the cheapest loan is hundreds of euros. This big difference is due to the fact that the Norwegian card has the highest interest rate in the comparison: a whole 20%!

Annual installments are suitable for small loan amounts

Annual installments are suitable for small loan amounts

Generally speaking, annual fee-free credit cards were cheaper for a smaller loan amount in the comparison: in the $ 500 example, Expensive Loans offered annual fee credit cards. This is because, with a small credit, the fixed charges (such as annual fees and billing fees) on credit cards become relatively more expensive.

In the larger example of $ 2,000, annual fee-free cards were among the most expensive loans in the comparison. This is because annual credit cards usually have a higher interest rate, which increases the cost of the loan in relation to the loan amount.

So when choosing a credit card, also think about your own consumption behavior. If you buy a lot with a credit card and don’t always pay the bill at the end of the month, an annual credit card may be cheaper.

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