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Best Credit Card In India With No Annual Fee

You may think that cards without a credit card annual fee are outright scams, or at least a way to siphon off your money by some obscure means. However, it is not so. There are many cards out there that charge no annual fee at all. As such, what is the point of getting a card with such an additional charge? Now that is a valid question.

Why Do Some Cards Have Credit Card Annual Fees? 

There is a reason why there are annual fees charged on credit card usage. In most cases, these cards come with a lot of exclusive membership rewards. The perks more than make up for the annual fees, as the rewards are often of higher value. 

The main reason why some of the credit cards offer big rewards in return for an annual fee is that these cards are for a specific section of the population. For instance, there are cards for frequent travelers, people who dine out a few times a month, and so on.

Customers who spend a lot on such credit cards generate much profit for the concerned credit card company or bank. This is why there are so many credit card offers vying to entice customers to get the card that matches their wishes and desires.

Generous and stellar rewards are furnished for those who know the best credit card usage tactics. However, such amazing offers cannot come for free, as the lenders have to find it profitable as well.

Many users who spend a considerable amount through their credit cards understand these benefits, and tend to use credit cards with annual fees. The rewards arise from two sources: signup bonus and the rewards produced from your spendings.

The Difference Between Credit Cards with an Annual Fee and Zero Annual Fee Credit Cards

As we said before, you would want to pay annual fees on a credit card only if its benefits outweigh the costs. The rewards need to be substantial. If not, credit cards with no annual fees are a far better choice.

The most significant advantage of zero yearly fee credit cards is that you can keep them active without any extra costs. Additionally, if you spend very less through such cards, your credit score will be improved due to the lower credit utilization ratio

Some of the zero annual fee credit cards are HSBC Platinum Credit Card, ICICI Platinum Chip Card Visa, and Yes Bank Prosperity Reward Plus.

Facilities Provided by a Credit Card with an Annual Fee

If you are still on the fence, this section may help you to decide what kind of card best suits your needs. Expensive credit cards and those with annual charges may seem like a bad option, but the benefits are many. 

Here are some of the benefits and facilities offered by credit cards with annual fees. 

  1. Spending rewards are more than the annual fee: When you spend and reach certain milestones, you become eligible for certain sizable rewards. These can be in the form of valuable reward points, or some other way. You can, of course, redeem these points for future purchases.

  2. You get a sizeable welcome bonus: Zero annual fee credit cards may not give you much in the way of welcome bonuses, but credit cards with annual fees in India do offer you a large welcome bonus. 

  3. Valuable perks: The best credit cards give you a host of perks, travel benefits being one of these. Travel perks include airport lounge access, free hotel stays, memberships in airline loyalty, and hotel loyalty programs. 

  4. Special features: These cards come with certain special features, like the ability to transfer points.

  5. Insurance and additional protections: One of the most significant benefits of these credit cards is that they offer valuable and even expensive insurance coverage policies as a reward. These can be in the form of trip cancellation or flight delay insurance, car rental coverage, emergency travel assistance, and others. 

  6. Entry into a rewards program: If you make major purchases with your credit card, its rewards program can more than offset the cost and annual fees.

Top 5 Credit Cards in India

This list shows you credit cards with no annual fee as well as cards with fees. HSBC Visa Platinum Card and IndusInd Bank Platinum Card are the two best no-annual-fee credit cards of 2019. The list was prepared as per the details valid on September 11, 2019.

Card

1st-Year Fee

Rewards

Joining Perks

HDFC Bank Diners Club Black Card 

Rs. 5000. This shall be reduced to Rs. 0 if you spend more than Rs. 100000 within the first 90 days

5 points for every Rs. 150 spent

10x points at selected retail stores

10000 points

Citi Cashback Card 

Rs. 500

5% cashback on telephone bills, movie tickets, and utility bills, and 0.5% cashback on others 

None

HSBC Visa Platinum Card 

No fees

6 points for every Rs. 150 spent for hotel booking, telecom, and dining for the first year.

10 points for every Rs. 150 spent for 4-10 lakhs spent a year.

2 points for every Rs. 150 spent on everything else.

10% cashback

Rs. 2000 Cleartrip voucher

IndusInd Bank Platinum Card 

No fees

1.5 points for every Rs. 150 spent

None

IndianOil Citi Platinum Card 

Rs. 1000, but reduced to 0 if annual spending is more than Rs. 30000

Various reward points for fuel, groceries, and at supermarkets.

None

Can the Fee Be Waived?

There are a few ways in which your credit card annual fees can be waived: 

  1. Ask for the fee to be waived: “Ask and ye shall receive.” You may have heard that one before! When it comes to the realm of credit fees, the foremost thing you can do is to ask the lender to waive off the fees. You’ll be surprised to see how often it works. However, the lender would require a very good reason for waiving off your fees. 

  2. Give an ultimatum to leave: If nothing seems to be working, you could gently hint that you mean to leave. Most of the time, lenders would not want to let you go, given you have been a good customer so far with a clean record.

  3. Take cards that have no charges for the first year: One good solution is to get cards that require no fees or charges for the first year. There are many cards that have a reward system. According to these reward systems, if you spend a certain amount through your credit card, your annual fees get waived off.

  4. Downgrade your card: One perfect solution may be to downgrade your card altogether. Downgrading your credit card allows you to switch to one that is more affordable. This can be done without closing your credit account and opening a new card.

  5. Use credit card rewards to pay its annual fee: Over time, credit card reward points accumulate. We normally use these points for purchases. Why not use these same points to pay for the year’s annual fees instead?

If nothing seems to be working, maybe it is time to cancel the credit card and get one that better suits you.

Should You Take a Credit Card with Annual Fees?

Credit cards with annual fees are ideal for two groups of people. These two groups have different credit histories and credit scores.

  • Those with limited or bad credit: When one has a bad credit record, they may not get any other credit cards except for those with a yearly fee. It is then better to start with such a card, pay back debts on time, improve the credit score, and upgrade to a better credit card over time.

  • Those with excellent or good credit score: These cards are perfect if you are looking for excellent benefits and rewards. For instance, your annual fees can be waived off if you spend a certain amount within a year. Given you already manage your credit responsibly, paying back the amount should not be a big issue. 

If you fall in any other category, then this is the type of credit card you may want to have. 

Conclusion

You know your needs and requirements best. Weigh the different alternatives. Browse through the different credit card annual fee options on offer and consider the details, drawbacks, and perks of the various credit cards  before you take a call.

Most importantly, don't forget to check your credit score to see if you are eligible in the first place!

 

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