Many banks lure their customers with credit cards that have minimal fees. Aiming to attract more customers, their advertising campaigns always causes a stir. Indeed these beautiful adverts have absolutely nothing to do with accounts and conditions offered by the bank.
There are several selection points that one should consider before taking out a credit card, these include:
Point 1: Annual fees
Many online institutions have credit card offers that do not charge annual fees. However, this alone is not enough because these banks usually offer credit cards only in conjunction with a checking account.
Point 2: Conditions and Interest rates
It is important not only to know what the account management fee is but also the interest rate charges. This is because most of the time using a credit card causes one to overdraw their checking account and thus it would be better to know the rate of interest charged for overdrawing your account (Dispokredit). If your interest rate is high, then using a credit card provides no benefits even though the card doesn’t charge annual fees for example the Hamburger Volksbank offers a credit card without annual fees but this card attracts an 11.45% interest.
Customers can ignore the many extras offered by banks in a bid to lure them.
Some of these offers include mobile phone insurance offered by Commerzbank and Foreign Travel Liability Insurance by the Santander Consumer Bank are available as a bonus to credit card and are mostly valid only under narrow conditions. Also offers of lower rates by certain tour operators, who work with banks should not be the reason for choosing a new credit card. However there is no objection against quotations or offers in which the customer receives higher credit interest for having a positive balance in his account in addition to the credit card on his checking account. An example of this offer is DKB. While ING- Diba Community Action with “DM” is transparent the terms and conditions still apply: The credit card does not cost any fee and the interest rates are not high at 8.5%.
You can listen to our expat give tips on choosing the correct bank account.