Credit card annual fees can be a hassle. Cardholders hate paying for them and credit card companies know it. Many credit cards these days offer to waive the annual fee for the first year. For the percentage of credit cards that do not offer the first year free, waiving the annual fee can be as easy as calling the bank. So why is that?
It is free to Waive the Annual Fee
Free is always the best price for anything. Credit cards realize this, which is why they offer to waive the annual fee when you sign up with them. It’s a huge incentive that is tempting to anyone because it cost future cardholders nothing. The first year without annual fees are similar to having a free sample. it’s nice to have and there isn’t anything to lose in taking the offer.
However, Everything Comes at a Price
Within credit card companies’ free offer, there is a hidden price for signing up a year without annual fees. What credit cards companies don’t put in the fine print of their offer is that after a year of having something for free, it’s hard to remember you need to pay once that year is up. Along with becoming complacent with their card’s free status, having a card with negative consequences for a year makes cardholders more prone to stay with that card. It’s a truth universally acknowledged that people do not like change, so what makes their credit card any different?
Is it Worth it?
Writing off a credit card with an annual fee is never a good idea. Some of the advantageous credit cards have annual fees such the Chase Sapphire Preferred, the Barclaycard Arrival Plus, and the Starwood Preferred Guest. However, these credit card companies also know that seeing an annual fee versus a card without an annual fee, people will initially always choose the free card. Sometimes that initial glance of free and not free is all it takes. The “waive the annual fee the first year” was created to psychologically give these annual fee credit cards a better chance to compete with the non-annual fee cards. What it comes down to are the benefits the card gives fit the cardholder’s need? A year without annual fees is the credit card companies’ way of challenging potential cardholder to find out for themselves because its hard to pass up a free sample.