Search for a new credit card and the words ‘free for life’ will often pop up. It sounds great on paper, but what does that slogan actually mean?

‘Free-for-life’ credit cards mean that you will never be charged an annual fee, ever. But before you sign on the dotted line, you need to question whether it really is the best deal.

Credit cards with no annual fees are generally a bank’s ‘basic product’. There are exceptions to the rule, such as the premier credit cards from HSBC, Barclays and a few other banks, but these are generally given when you open an account with the bank and keep a high balance.

“Apart from the premier credit cards, you won’t find golf benefits, high rewards or loyalty programs generally attached to the free-for-life cards,” explains Ambareen Musa, CEO of “Instead, free-for-life cards are geared more for the consumer base that is fee-conscious and generally uses a credit card for emergencies or specific transactions only. It is a ‘means to something’ rather than a lifestyle benefit.”

As a result, those that want to stack up air miles or enjoy shopping or dining discounts might need to look elsewhere. And that often means they will need to pay an annual fee in order to reap the rewards they want.

However, if you only want access to credit occasionally, this type of credit card could be for you. It is there when you need it and, as long as the balance is paid off in full, you will not get charged when you don’t use it.

  • Let’s take Sangeeta‘s example.  She only uses the credit card once a year to pay for her AED 3,000 flight home to see her family. She pays off the full balance the following month and then does not use the card again, meaning the bank gains nothing from her custom. So, what is in it for them?
  • Well, Richard is not as financially-savvy as Sangeeta.Richard might use the credit card once and then a couple more times. When he can’t pay off the outstanding amount, he gets charged 2.5 percent interest on the outstanding balance. If that balance is AED 10,000, and Richard only pays off AED 500 a month, it will take him 28 months – that’s over two years ­- to pay off the credit card, earning the bank thousands in interest.

Generous salary required

The other thing to consider is that, once a customer has signed up for the card, the bank can entice them with exciting offers to encourage them to increase their spend on the card and, in turn, their chances of paying interest.

Finally, if you really want a free-for-life credit card, you might want to check your pay slip before you apply. Some credit cards in this category require you to open a bank account and have a solid minimum salary.

While the standard is AED 5,000 to AED 8,000 for a standalone free-for-life card, for those that come with added extras, such as access to airline lounges, it goes as high as AED 50,000.

So, while a card may be free for life, you need to earn a generous salary before you can save on annual fees.

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