Not only do credit cards often make it easier for their owners to make everyday payments, many also offer even more convenience with additional insurance and discount programs. But conventional cards come with costs. Do you want to do without them and save money instead? Then you can opt for a free credit card that waives the annual fee. However, free of charge does not mean completely free of charge: In our guide, we show you which fees you can still incur and what else you need to know about free credit cards. In our test, we took a look at the best offers for you.

WHAT IS A FREE CREDIT CARD?

Not all credit cards are the same. There are exclusive luxury credit cards that only the super-rich receive and credit cards from banks and savings banks for which you don't need to have special status or a fat bank account. The differences are sometimes considerable even from Visa Card to Visa Card, and even among the so-called free credit cards there are significant variations in performance and service. A credit card comparison that compares fees and services is therefore indispensable.

With a free credit card, the basic fee is waived in all cases. Unfortunately, however, it is not always the case that the use of the credit card really does not cost a cent. You should pay particular attention to whether costs are incurred when withdrawing money from ATMs and whether the basic fee is really permanently waived.

FREE CREDIT CARD: FOR WHOM DOES IT MAKE SENSE?

Free credit cards are suitable for most consumers: the banks do not charge any annual fees for these cards and the fees for withdrawals and payments are also manageable. As the owner, you save compared to expensive cards and at the same time do not have to cut back. On the other hand, free credit cards usually do not include insurance or discount programs.

Meanwhile, there are even gold and platinum cards, for which the respective providers do not charge an annual fee. These cards have other costs, which are sometimes hidden. That's why the standard offers are cheaper in most cases.

THE ALTERNATIVE: A PREPAID CREDIT CARD

If you do not receive a credit card from the bank, you can alternatively get a prepaid credit card. These cards can only be used on a credit basis. For this reason, most banks then do not check the Schufa information of the applicant and also do not look so closely at the age.

THIS IS HOW MUCH A FREE CREDIT CARD COSTS

Fees with free credit cards? It sounds like a contradiction - but it's quite possible. They make up the largest part of the costs. You can find the details in the price-performance lists and in the fee information if the card is part of a checking account.

In many cases, a withdrawal fee is charged when you withdraw money, for example, when you withdraw cash from ATMs or counters in the United States or abroad. Your bank determines the price.

Be careful not to confuse the withdrawal fee with the ATM fee. The card-issuing bank may charge withdrawal fees, and the ATM operator may charge its own fees on top of that. It can therefore happen that a bank advertises free withdrawal worldwide, but in certain countries costs can still arise at the ATM, which are usually not reimbursed by the bank. Often this is the case abroad. But Mastercard allows banks to charge such fees in the USA as well.

When withdrawing money or paying in currencies other than dollar foreign currency fees may be incurred. These are usually quoted as a percentage of the amount due.

However, some banks charge fees not only when you pay with your debit card in a foreign currency, but also when the vendor's place of business is in a country that does not have the dollar as its currency. This can then become a problem if you are shopping online and don't expect to pay fees because the product price is in dollars. Check with your bank to see if your card could incur foreign transaction fees.

If you pay with a currency other than the dollar within the European Union, a currency conversion fee will apply. For this, banks must use the European Central Bank (ECB) reference rate to exchange the currency. But even in this case, they may add an additional fee. Exactly how this turns out varies. Some banks set a certain percentage that they add to the respective rate. Others use the difference between the Mastercard or Visa rate and the ECB rate. So the fee depends on the currency and the daily rate. Some banks charge the fee not only in the USA, but worldwide.

In different forms, credit interest can be charged on debit cards. This can be either as overdraft interest, if you use your card beyond the account balance or do not have enough credit when the card debt is debited. Or as interest if you make use of partial payment.

WHAT YOU SHOULD LOOK FOR IN A FREE CREDIT CARD

When it comes to a credit card, it's not just the fees and charge methods that matter. There are other points that you should definitely pay attention to when making your choice and also when using it.

CONTACTLESS PAYMENT

More and more credit cards offer their owners the possibility of contactless payment. To do this, all you have to do is hold the card up to the POS terminal. For a low amount, this works without entering the PIN and also without a signature. Visa has set an upper limit of 50 dollars for this. With Mastercard, the limit is actually 25 dollars, but due to the Corona pandemic, the limit was also raised to 50 dollars.

Tip: Those who are not comfortable with this function have the option of deactivating it with some providers. However, this is not standard. If it is not possible with your provider, you can use a sleeve that shields the card chip. This is often provided free of charge by the bank if you ask for it.