Why Are We Charge Credit Card Fees
Why Are We Charge Credit Card Fees? Credit card fees are paid by anyone who uses them each time they carry a balance on their credit cards. Credit card fees and interests are the way issuing companies make their money. Each time users pay interest, companies make money. The issue is that, from the word go, no one wants to be in debt. And generally, debt or indebtedness is not a good thing. But over the years, experts have had to put a difference between debt that is good and debt that is bad. This has become the case because if you are in debt because you took a loan to purchase an asset or something that appreciates in value, that kind of debt is seen as a good thing as it will become profitable in the end. But if you took a loan to buy something that you have to pay more for or something that depreciates in value, it would be seen as a bad debt.
In this write-up, we want to take a look at why credit card fees are charged.
Generally, no one would want a credit card as it obviously makes you pay more. Let us find out why there are credit card fees.
Cards which charge fees may just have what you need
“Freebees” may not come with the best of qualities, sometimes and just sometimes, services that are paid for are those that come with what you may be looking for. As to whether it is all a perception or not, this is something that you must have at the back of your mind.
It stands to reason that a card with an annual fee may be just what you seek. If the fees are an issue for you, you might want to look out for an “annual fee-free” card to sign up to.
There are times when you would prefer a card that has a low-interest rate. Most credit cards that have high-interest rates are known to be some of the cards with the most secure features. Some have as high as an Annual Percentage Rate (APR) of 14.24% and an annual fee of USD 49.
Some credit cards that have annual fees are also some cards that give out some great rewards. They come with some great rewards, especially for travelling purposes.
Below are some of the credit cards that charge annual fees but are worth having because of what they offer. These would give you a good reason why credit card fees are worth paying.
Credit cards that give cash back to customers
The Blue Cash Preferred Card issued by American Express is one of the cards to go for if you need a card that will give you cash back. You will be greatly rewarded if you use this card in the form of cashback. With an annual fee of USD 0 for the first 12 months, you get to play USD 95 afterwards.
This is a very rewarding card to use, when you sign up, you get an offer for being a fresh comer. This offer gives you USD 250 credit after you have made an expenditure of USD 3000 after using your card for six months.
For travel benefits
If you want a card which charges fees but which gives benefits for travel purposes, you might want to consider the Chase Sapphire Reserve card. This card has a whopping annual fee of USD 550 but promises its users a lot of goodies. You can gain as much as 60,000 points of awards that can be converted into monetary value. You get this after you have spent up to USD 4000 patronage in your first 90 days after you sign up for the card. Besides this, there is more. You also stand the chance of a USD 300 credit known as statement credit which you get each year to use for travel expenses. You can use this to pay for NEXUS or for an application fee for Global Entry
In conclusion, there are various reasons why credit cards charge fees and most of them are for good. If you go for cards that charge fees, chances are that they come with a lot of good reward schemes for users.