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Annual Fee of the Credit Companies

Nowadays almost all people use the credit cards, as they are very flexible and convenient tool of money management. Usually the students apply for the receiving of their first credit card during the studying in college or university and they do not really understand the rules of the credit card usage and some basic moments concerning the credit cards.

Almost all providers of the student’s credit cards require the clients to pay the annual fees. The most popular student’s credit cards, such as Chase Continental Platinum Card, Chase Platinum Credit Card offer the annual fee from $ 5 to $ 250. Why the clients have to pay such type of fee and what is the difference between different offers?

All the people understand that the main aim and main motivation of the credit companies is to earn the money. The credit companies can earn the money in the following ways: to require the payment of the annual fees from the clients; to require payments of the interest rates for the usage of the credit cards and to receive penalties in the case of missed payments and broken rules.

If the lender does not require the annual fee, he will still receive his money with the help of penalties and higher level of interested rates. But is the lender requires the payment of the annual fees, the interest rates are not usually very high and the penalties are also not very strict. If the annual fee is only $ 50 per year and the company has at least 200 000 clients, the lender will receive $ 10 millions of incomes during the year only on the annual fee. In this case the company can provide low level of interest rates.

So each client has to decide independently what type of offer will meet all his needs and requirements. If you will keep all the rules and will not miss the monthly payments, choose the offer without annual fee, but if you will miss the payments, it is better to choose the offer with annual fee and lower level of interest rates.