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Free Credit Cards

Free Credit Cards: An amazing offer, or marketing gimmick?
If you’ve ever been badgered by telemarketers – asking you to go for a free credit card, rest assured, it’s not free. All credit card companies are here to make money and giving away a card free is certainly not on their money making agenda. These are at best marketing gimmicks to lure unsuspecting customers.

What’s free and what’s not
Ever went for a free credit card only to realize later only the Annual fee was zero? You’re not the only one – hundreds of customers have been carried away with false promises of free cards. Here we demystify some of the aspects of a so-called free card.

Annual fee:
The Annual fee is only a yearly payment that you make on the card. A zero Annual Fee does not by any means indicate that the card is free. It only indicates exemption from paying this particular fee. Another point to be noted is that Annual Fees, in general, aren’t so high. So a zero Annual Fee doesn’t really provide you with much benefit.
0% APR:
APR stands for Annual Purchase Rate. It is basically the rate at which your purchases on the card will be charged. Having a zero APR can mean good news – but only during the promotional period. Usually such a rate lasts for 6 to 12 months. After that it rises to the standard rate, which can be unusually high. Consider getting a 0% APR card only if it’s for a sufficiently long period.
0% Balance transfer:
Balance Transfers are good to consolidate your existing debts. For example, if you have a lot of outstanding balances on your existing cards, you can transfer these to a new card that offers a lower interest rate. Most cards nowadays offer a 0% balance transfer rate. However, here too, check on the duration of the promotion. It will usually last 3 to 6 months. After that, the rate is back to normal, which again is very high.
No balance transfer fee:
Most credit card companies will charge a balance transfer fee, especially if they’re offering a 0% balance transfer rate. The fee will range from 2 to 3 percent. However, there are still a few companies that offer zero balance transfer fee cards as well.

Other promotional offers thrown in
Very often a free credit card will also have some other offers thrown in. For example, some allow you to accumulate rewards points on purchases. You can later redeem these points against new purchases made on the card. Some other cards will also offer frequent flyer programs. For example, if you're a frequent traveler and use your credit card often to purchase airline tickets, you can accumulate frequent flyer miles. These can be redeemed against other tickets purchased. However, here too, there is a catch involved. Most of the airline tickets are very costly and only on purchases up to a certain limit, can you get miles. This means, it could take many airline trips and expensive tickets before you can get one ticket’s worth of miles.

Many credit cards will also offer free stays in expensive hotels – but that's only if you have already spent a lot on the card for hotel stays. Also, many of the terms and conditions of these credit cards may not include stays outside the country. That restricts the usage to a great extent. Some of the cards even allow you to rent cars free of cost. However, this too may be restrictive geographically. All in all, no credit card is ever free. There’s always some ‘catch’ involved. It’s better to read the fine print on a free credit card before signing up.

NEED A FREE CREDIT CARD? SEE IF ONE OF THESE OFFERS WORKS FOR YOU

CREDIT CARD TYPES

Choosing the credit card that's best for your needs and situation starts with knowing what options are available to you. The following list details the most common credit cards available:

	Balance transfer credit cards - Balance transfers are a way of transferring outstanding balances from existing credit cards to another card that offers a lower interest rate. For example, if you your have a high annual percentage rate (APR) credit card with a significant outstanding balance, you can transfer the balance to another card with a lower rate or even one offer zero interest. Typically these cards offer low balance transfer rates for a specified period of time allowing you to save hundreds (or even thousands) of dollars in monthly interest charges.
	Low-interest credit cards - These cards offer a low introductory annual percentage rate (APR) for a promotional period, after which they can change to a higher rate or a fixed-rate. If you plan on making a large purchase, it's a good idea to pick up a low-interest credit card to take advantage of the savings on interest during the introductory period.
	Cash rebate credit cards - Cash rebate cards accumulate "points" for1 every purchase you make using the card. Most cash reward cards award a point based off 1% of the purchase total, excluding interest and finance charges. For example, if you make a purchase for $1,000 the credit card will award you with 10 points (or, $10.00). These cards are great for loyal customers who make payments on-time every month.
	Reward credit cards - Reward credit cards are similar to cash rebate credit cards, but differ in that they offer various forms of "rewards" for the purchases you make. For example, you can accumulate rewards for frequent-flyer-miles, free magazine subscriptions, and even hotel and travel discounts. Ideal for those who enjoy getting something for free from their credit cards.
	Travel credit cards - Travel credit cards are ideal for the frequent flyer who travels the globe on a frequent basis. These cards accumulate significant reward points every time you make a travel-related purchase. You can gain discounted airline tickets, rent cards for free, and even get discounted hotel rates!
	Pre-paid credit cards - Pre-paid credit cards are ideal for those who are on a tight budget and don't want to fall prey to the financial pitfalls associated with standard credit cards. They work similar to gift certificates or debit cards. You deposit money into the card and then use the card to make purchases as you would a typical credit card.
	Secured credit cards - Secured credit cards are ideal for people with poor or no credit. They work on a collateral system, where you put up something of value against the debt on the card.