The best credit cards with no annual fee can look very attractive: You won’t pay for the privilege of carrying them in your wallet, you can earn a welcome bonus and you can earn ongoing rewards. However, no-annual-fee credit cards are not all created equal. While they all share the lack of an upfront yearly cost, there’s a lot more to consider including welcome bonuses, cash back and points-earning opportunities, and other benefits. Additionally, you’ll need to think about a related question: Could a card with an annual fee be worth it?
Methodology
Our team of experts reviewed over 200 no-annual-fee credit cards, considering various factors including rewards, welcome bonuses, intro APR offers and benefits. Using a data-based approach, we narrowed down the list to the top 10 credit cards that scored highly based on our weightings. Read our full methodology below.
Chase Freedom Unlimited®
Regular APR
20.49% – 29.24% Variable
On Chase Bank USA, NA’s Secure Website
Our picks at a glance
Is a no annual fee credit card right for you?
- How much are you planning to use the card? If you don’t plan to charge many purchases to the card, a no-annual-fee card may be the best option for you.
- What does your credit history look like? If you have a limited credit history or past negative marks on your profile, you may not qualify for the best no-annual-fee credit cards. Instead, you may need to consider the best cards for bad credit, which also do not charge annual fees.
- What is your regular spending routine? Consider the potentially high rewards rates on a card with an annual fee for categories such as grocery shopping, travel and dining out. If you spend a lot in a certain area, you may be able to easily offset an annual fee with your rewards.
What didn’t make the cut
If you’ve been comparing options for the best credit cards with no annual fee, you might be surprised to see a few omissions from our list. However, there are good reasons that the following cards didn’t crack our top 10.
- Discover it® Cash Back: Like Chase Freedom Flex℠*, the Discover it® Cash Back earns 5% cash back on purchases at different places each quarter up to $1,500 spent each quarter when activated and 1% cash back on all other purchases. However, the Chase Freedom Flex℠* is a more versatile everyday card with 3% cash back at drugstores, 3% cash back on dining and 5% cash back on travel booked through Chase — all of which beat out the standard 1% cash back on every purchase with the Discover it® Cash Back.
- Capital One Quicksilver Cash Rewards Credit Card: The Capital One Quicksilver Cash Rewards Credit Card loses in a head-to-head battle with the Capital One VentureOne Rewards Credit Card. All Venture cards come with the ability to transfer miles to Capital One’s travel partners, which can create higher value and take you further – literally.
- Citi Custom Cash® Card: While the Citi Custom Cash® Card offers 5% cash back on up to $500 in your top eligible spending category for each statement cycle, that $25 value isn’t enough to outshine the transfer value potential of the miles you can rack up with the Capital One VentureOne Rewards Credit Card.
- Blue Cash Everyday® Card from American Express: The Blue Cash Everyday® Card from American Express’s (terms apply, see rates and fees) welcome bonus is significantly harder to reach than the Capital One VentureOne Rewards Credit Card: It requires $2,000 of spending, compared to just $500 for the Capital One VentureOne Rewards Credit Card. Plus, this card isn’t a good option if you’re planning to travel outside the U.S. due to a foreign transaction fee of 2.70.
What are no-annual-fee credit cards?
No-annual-fee credit cards are exactly what they sound like: They are cards that do not charge a yearly cost for an account. However, you can still wind up paying other costs for using the card. If the card charges foreign transaction fees, you will need to pay if you use it for international spending. And if you transfer a balance from another card, be prepared to pay a cost based on the total transfer amount.
Some credit cards advertise a $0 annual fee in the first year, but then charge an annual fee starting in the second year. These are not part of the no-annual-fee credit card category. Instead, they offer a lower cost to sweeten the deal for new customers.
Pros and cons of no annual fee credit cards
Applying for a new credit card is a big financial decision that will impact your credit. Before you decide to add a new card to your wallet, weigh the potential advantages and drawbacks of credit cards with no annual fees.
Pros
- No yearly cost for using the card
- May offer welcome bonuses
- May offer bonus points and cash back opportunities for certain spending categories
Cons
- May offer smaller welcome bonuses than cards with an annual fee
- May offer smaller rewards payouts than premium cards with annual fees
- May still charge other fees
How to choose the best no annual fee credit card for you
Know your credit score and card options
While lenders rarely offer public information about exact credit score requirements, your score will play a key role in your application. Some credit cards with no annual fee are reserved for those with good to excellent credit.
For example, the Capital One SavorOne Cash Rewards Credit Card and Capital One VentureOne Rewards Credit Card both require excellent credit, which Capital One defines as having never declared bankruptcy or defaulted on a loan, having never missed a bill’s due date by more than 60 days and having already maintained a loan or a credit card for at least three years with a minimum credit limit of $5,000.
Know what kind of rewards you want to earn
No-annual-fee credit cards earn different types of rewards. Some offer straightforward cash back that you can apply as statement credits or convert into cash. Others earn points that act as a currency in the issuer’s rewards program that you may be able to spend on travel, merchandise, gift cards and more. If you are a frequent traveler, you may be well-suited for a co-branded card, such as the IHG One Rewards Traveler Credit Card*, that will earn points or miles for one airline or hotel brand you really love.
Evaluate your spending habits
Some no-annual-fee credit cards pay a flat rewards rate that applies to every purchase, and others pay higher rates in certain spending categories. Look at your online banking statements to analyze past spending patterns and determine which kind of rewards structure is a better fit. For example, if you do all the grocery shopping for your household or you do a lot of driving for work, look for a card that offers elevated earning potential at supermarkets or gas stations.
Consider what other benefits are important to you
In addition to avoiding an annual fee, think about your other priorities for a new card. Do you travel outside the US? You’ll want to find a card that doesn’t charge any foreign transaction fees. Are you working to pay off another credit card? Look for a card that offers a 0% introductory APR on balance transfers. While you will likely still need to pay a one-time fee to transfer the balance, you may be able to get up to 21 months of interest-free time to tackle that debt.
How to maximize your no-annual-fee credit card
With a no-annual-fee credit card, you’re looking at all upside since you don’t have to hit any rewards amount to break even. With that in mind, follow these tips to make the most of carrying that card in your wallet:
- Hit your welcome bonus spending threshold. Some no-annual-fee credit cards offer bonuses if you spend a certain amount of money shortly after opening the account. A common offer is a $200 welcome bonus after spending $500 in the first three months.
- Take advantage of any introductory APR offer. Your card may offer an introductory period with a 0% APR, which can be valuable in paying off big purchases without racking up any financing charges. In some cases, the 0% offer also applies to balance transfers, which can help you save money if you have been struggling to pay down another credit card. If you are planning to transfer a balance, do it with a defined strategy to get that debt down to zero.
- Know when to use it. If you’re carrying multiple credit cards in your wallet, know which card is best for certain spending situations. For example, if your no-annual-fee credit card pays an elevated cash back rate at drug stores or grocery stores, make sure you’re using it to rack up more value.
- Pay your balance in full every month. Consider this to be your golden rule that applies to every kind of credit card, regardless of its fee structure. As long as you pay off your statement balance on time, you won’t pay any interest.
Are credit cards with annual fees worth it?
Paying an annual fee for a credit card can work in your favor, particularly if the card offers a welcome bonus. And if the rewards structure aligns with your regular spending habits, you can justify paying the cost each year based on your ability to accumulate enough points or cash back to deliver a greater value than the annual fee.
Consider the breakdown between the Chase Sapphire Preferred® Card (one of the best rewards credit cards) and the Chase Freedom Flex℠*:
For regular travelers who are booking reservations directly with hotels and buying flights directly with airlines, the Chase Sapphire Preferred® Card’s 2x points on travel can justify the annual fee. For example, spending $5,000 on non-Chase Travel each year will earn $100 in rewards ($125 in value when redeemed for travel via Chase). Additionally, for travelers who will take advantage of booking via Chase, the $50 annual hotel credit for the Chase Sapphire Preferred® Card can offset more than half the card’s annual fee.
Methodology
Our money and data analytics teams evaluated over 200 credit cards that do not charge an annual fee. From there, we narrowed down our list of the best no-annual-fee credit cards by giving them a star rating out of five, based on the following factors and our editorial judgment:
Rewards value (30%)
Not all credit card points and miles have the same value. We used spending data from the Bureau of Labor Statistics and valuations from The Points Guy to determine which cards dole out the best rewards value.
Welcome bonus value (30%)
Many cards offer bonus cash back, points or miles to consumers who spend a certain amount in their first months with the card. We calculated how much those bonuses are worth using points valuations from The Points Guy, and boosted cards that offer more value.
Benefits (20%)
Cards that offer benefits such as cell phone protection, purchase protection, extended warranty and a 0% introductory APR on purchases and balance transfers received a boost.
Pricing and fees (10%)
Cards with no foreign transaction fee and lower variable APRs received a boost compared to cards with higher fees and rates.
Annual credits and bonuses (5%)
Credit cards that come with credits and bonuses for spending in categories including groceries, dining, entertainment and gas received a boost.
Low credit threshold (5%)
No-annual-fee cards that are available to consumers with subpar credit received a boost compared to cards with higher minimum credit requirements.
Frequently asked questions (FAQs)
Credit cards that charge an annual fee often have bigger welcome bonuses with higher minimum spending requirements. Cards with annual fees also often offer additional benefits compared to cards from the same issuer that do not have an annual fee. Some cards that charge an annual fee are geared toward consumers with bad credit and do not offer strong rewards.
Yes, issuers can waive annual fees on a credit card. If you are encountering financial hardship or you are considering canceling a card, you may want to call the number on the back of your card to ask about the potential for waiving or reducing the next fee installment.
You may be able to get a credit card with no annual fee if you have bad or limited credit. In some cases, you will need to pay a security deposit that will act as your credit limit. As long as the deposit is refundable, you will get the money back with responsible credit behavior, including making on-time payments. Additionally, the issuer may offer the option to upgrade to an unsecured card.
Yes, some no-annual-fee credit cards also have no foreign transaction fees. The Capital One VentureOne Rewards Credit Card, Capital One SavorOne Cash Rewards Credit Card and the Wells Fargo Autograph℠ Card all have no annual cost and no foreign transaction fees, for example.
Cards including Chase Freedom Flex℠*, Chase Freedom Unlimited® and the Wells Fargo Autograph℠ Card offer insurance on rental cars. Before you use any credit card to insure your car rental, make sure you read the terms and conditions to determine what will be covered.
To view rates and fees for Blue Cash Everyday® Card from American Express please visit this page.
To view rates and fees for Capital One VentureOne Rewards Credit Card please visit this page.
To view rates and fees for Capital One SavorOne Cash Rewards Credit Card please visit this page.
*The information for the following card(s) has been collected independently by CNN Underscored Money: Chase Freedom Flex℠ and IHG One Rewards Traveler Credit Card. The card details on this page have not been reviewed or provided by the card issuer.
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