Credit cards and fees seem to go hand and hand, much to the average consumer's dismay. Considering credit cards are a necessity, some people may opt only to explore cards that have no annual fee because that's one less to worry about. But that narrow view of building credit could limit your options and benefits. Plus, any no annual fee card could easily become an annual fee card while it sleeps in your wallet. Changes in terms, in a way, are at the whim of creditors.
When it comes to annual fees, the industry standard is there is no standard. Fees can range from $25 to as much as $500, or more. A good rule to keep in mind is that the higher the fee, the more benefits the card is likely to bestow. For Capital One cards that rule of thumb rings true. Here's the scoop on Capital One credit cards with annual fees and what they can offer you.
Capital One: The Competition
While there has been a recent trend of credit card companies adding more fees and increasing existing fees, Capital One continues to maintain low fees while still providing great benefits from its cards. Some of the most highly recommended rewards cards from other companies share this trait. Take a look at some of Capital One's competition.
The Chase Freedom provides cashback rewards. The rewards don't expire and the card may have an APR incentive as described by the card issuer.
If you're not the type to have multiple cards in your wallet and prefer just one, this might be the one for you. With expansive bonus categories and a 0% APR for 15 months, this card is a solid choice.
- 5% cash back on up to $1,500 in combined bonus categories every quarter that you activate.
- Unlimited and automatic 1% cash back on every other purchase.
- Cashback rewards won't ever expire as long as your account is open.
- Free credit score with Credit Journey™, updated on a weekly basis.
Everyday Cash Back
Unlimited and automatic 1% cash back on every other purchase
No Annual Fee
The BankAmericard Travel Rewards card is similar in a number of ways: It provides cashback rewards also, with extra rewards at grocery stores, wholesale clubs and gas up to a given spending threshold. You'll also receive a customer loyalty bonus if you redeem through a Bank of America checking or savings account.
The final card we'll use for comparison is the Citi Double Cash Card. It's one of the best choices for a cash rewards card because you earn cashback rewards… twice. Hence the clever name. Pretty awesome, right?
It's called "Double Cash" because you get 1% cash back at time of purchase and another 1% cash back when you pay it off. That's best-in-class for cash back.
- If you love tons of cashback and like to keep it simple, this card is for you!
- One of the most popular cash back cards, 2% cash back.
- 1% cash back on all purchases .
- 1% cash back as you pay for those purchases, as long as you pay the minimum due.
- Without any caps or category restrictions.
Credit Scores: What's Required for Capital One?
The vast majority of Capital One credit cards require you to have an Excellent credit rating or higher to apply. This means your score should be 720 or more. However, the Journey Student Rewards Card only Average credit in order to qualify.
The Capital One Journey Student rewards credit card is perfect for students who have average credit. Perhaps they've purchased a car, opened a store card or paid off a small personal loan, but don't have a long-established credit history that will help them later in life. Having a good to excellent credit score built on great habits is an important part of adulthood that young people must embrace, and that's what the Journey Student Rewards card allows them to do.
- Great for building your credit if used responsibly.
- Receive 1% cash back on every purchase, pay on time and boost your cash back to 1.25% for that month.
- Choose your payment date.
- Gain access to a higher credit line after you make your first 5 monthly payments on time.
Differences: Low Fee and No Fee
In most cases, cards with no annual fees provide fewer rewards than those with annual fees. That said, this isn't always the case; as stated above, Capital One has several cards that break away from this norm and provide high-yield rewards with no annual fee at all.
Deciding between an annual fee and non-annual fee offer is difficult; in many instances, the introductory period without an annual fee is accompanied by an increased reward period which will equate to a much greater value than the annual fee would. However, this is only useful to cardholders that take full advantage of this period.
Travel and credit hackers would benefit most from cards like this. The average credit card user, on the other hand, would most likely be better off with no annual fee. The question you have to ask yourself is if the rewards you generate each year be worth the fee that accompanies the card.
For example, if you earn 1% cash back on a card with a $59 annual fee, you would need to spend $5,900 per year to break even. If you don't spend that much each year with your credit card, you're losing money for the privilege of owning it. Worse yet, if you don't pay your balance off on time each month, you're losing even more money.
Are Annual Fees Flexible?
It's entirely possible to request a lower annual fee with most creditors, Capital One is no different. While many credit card companies may have rules that are ‘set in stone,' most companies are also willing to bend the rules a bit to keep their customers happy.
In some cases, companies might not be able to waive or change the fees, but may award cardholders a point or mile bonus for their trouble. Most cardholders do not realize they have the power to pick up the phone and request changes to their existing credit account.
While it isn't guaranteed that anything will be done, give your credit card's customer service department a call and find out what they can do for you. The annual fees for each of these cards will likely be a factor in which you want to apply for. No matter what, make sure you read the fine print!