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Bankrate helps you find the right no annual fee credit card
Author: Barry Bridges | bbridges@bankrate.com
Choosing the best credit card with no annual fee actually means choosing the one that’s best for you. Bankrate makes your search easier by taking a close look at the top cards available from our partners to see which no annual fee credit cards truly stand out. Our credit card experts also help you understand the ins and outs of getting the most out of your card every day.
You can read all our current research on best no annual fee credit cards below, or click on the links to skip ahead to a particular section.
Best No Annual Fee Credit Cards
Capital One® Quicksilver® Cash Rewards Credit Card
Pros
The Capital One Quicksilver offers an enticing combination of straightforward rewards earning and Visa Signature® Benefits, all with no annual fee. You get unlimited 1.5% cash back on every purchase, every day, as well as perks including emergency assistance, auto rental coverage and fraud coverage. This card’s 0% intro APR offers on purchases and balance transfers can also help you avoid interest for the first 15 months of ownership. (After the offers expire, variable APR on purchases and balance transfers goes to 15.49%-25.49%.)
Cons
If you have good or excellent credit, you could easily find a credit card that offers a higher rewards rate. The same goes for rental car coverage and similar perks, which are hardly exclusive to this card.
The last word
If you’re new to credit cards, the Capital One Quicksilver could provide an easy-to-use introduction to rewards programs and benefits. The card even puts out the welcome mat with an easily obtainable sign-up bonus ($150 after spending $500 within the first three months), not to mention the lack of an annual fee.
Read the full review and apply on Capital One’s secure website.
Citi® Double Cash Card
Pros
This card earns unlimited 2% cash back on all eligible purchases (1% when you buy and 1% when you pay for those purchases). With a flat-rate rewards system, you don’t have to adjust your spending habits to focus on different types of purchases.
Cons
If you carry a balance from month to month, you’ll delay some cash back value on the second stage of the rewards system (“1% when you pay”). Rewards aside, we recommend paying your bill in full every month on general principle.
The last word
With no spending categories to track and no annual fee to worry about, it doesn’t get much easier than the Citi Double Cash Card. The card offers an attractive combination of low maintenance and high rewards potential.
Read the full review and apply on Citi’s secure website.
Bank of America® Travel Rewards Visa® credit card
Pros
You get a respectable rewards rate (1.5 points per $1) and flexible redemptions without having to pay an annual fee. Also, if you’re a member of BofA’s Preferred Rewards program, you can earn 25% – 75% more points on every purchase.
Cons
If you consistently take a lot of trips year after year, you might find a premium travel card worth the annual fee. Also, top-tier cards tend to offer more in the way of choice perks including airport lounge access.
The last word
The Bank of America Travel Rewards Visa has quite a bit to offer the casual traveler with qualifying Preferred Rewards accounts with BofA. If you fit that profile (and you don’t like annual fees), this card could make a useful travel companion.
Read the full review and apply on Bank of America’s secure website.
Bank of America® Cash Rewards credit card
Pros
If you want a cash back card that offers exceptional rewards on gas purchases without charging an annual fee, take a look at the Bank of America Cash Rewards card. Gas purchases are just one of the six 3% options you can choose from, so you’ll want to select “Gas” as your choice category and keep it there.
Cons
Despite the card’s generous rewards for gas purchases, cardholders can’t maximize its potential value unless they’re also Bank of America Preferred Rewards clients. If you don’t have a BofA banking or brokerage account with a significant account balance, you’d miss out on cash rewards bonuses of up to 25% to 75% on every purchase.
The last word
Even if you don’t bank with BofA, focus on the cash back rewards for gasoline. This card still offers a lot of value in that area, along with the 2% back at grocery stores and wholesale clubs (up to $2,500 in combined choice category/grocery store/wholesale club quarterly purchases) and unlimited 1% back on all other purchases.
Read the full review and apply on Bank of America’s secure website.
Chase Freedom Unlimited®
Pros
The Chase Freedom Unlimited is kind of a Swiss Army Knife of credit cards. It works well for flat-rate rewards and also has competitive intro offers for balance transfers and new purchases (15 months at 0% APR, 16.49% – 25.24% variable APR afterward).
Cons
Unless your main goal is to pay off a balance transfer or a large purchase with 0% intro APR, other cards on the market have more to offer in the rewards department. Some may be able to match (or even exceed) the Chase Freedom Unlimited’s intro APR offer while providing a better rewards rate and no annual fee.
The last word
The card’s long-term value might be limited unless you pair it with one of Chase’s Sapphire cards to boost the rewards value. Just think twice before you cancel it out of hand, since closing an account can affect your credit score.
Read the full review and apply on Chase’s secure website.
Capital One® VentureOne® Rewards Credit Card
Pros
The Capital One® VentureOne® Rewards Credit Card can help you take more trips while telling annual fees to take a hike. You’ll earn 1.25X miles on every eligible purchase with the card. The no foreign transaction fee on this card also allows for you to swipe abroad without any worry of incurring additional costs.
Cons
To stretch your miles further, you might consider a different travel rewards card or a card with a specific airline or hotel chain. Using loyalty points gives you a chance to look for the best deals and potentially get more value per point/mile.
The last word
As a high-value travel card that doesn’t charge an annual fee, the Capital One VentureOne is a rarity. For travel enthusiasts, the flexible redemption options are sure to feel like a rare treat.
Read the full review and apply on Capital One’s secure website.
USAA® Rate Advantage Visa Platinum® Card
Pros
If your credit is good enough to qualify for one of the super-low APRs, it could relieve some of the pressure should you ever find yourself carrying a balance. Cardholders won’t have to worry about an annual fee either, another quality that makes this card an economical choice.
Cons
Unless your FICO Score falls in the good-to-excellent range (670-850), it’s unlikely that you’ll qualify for a lower APR. Unlike other cards available from USAA, this one doesn’t offer cash back rewards.
The last word
The USAA Rate Advantage Visa Platinum Card offers one truly outstanding feature — some of the industry’s lowest APRs — and yet the credit score requirements are fairly steep. It can be a useful card, but for a very specific type of military consumer: someone who’s mainly interested in cushioning the blow of interest charges if they carry a balance on the card.
Read the full review and apply on USAA’s secure website.
Citi Rewards+℠ Card
Pros
The “plus” in Citi Rewards+ refers to the unique feature that rounds your rewards points up to the nearest 10 on individual purchases. You can get 10% Points Back for the first 100,000 ThankYou Points you redeem per year.
Cons
Rounding up aside, some cards simply provide more bang for the buck on rewards rates. You may also have difficulty getting maximum value for points earned with this card if you transfer them to Citi travel partners.
The last word
The round-up feature makes Citi Rewards+ an excellent choice for people whose everyday spending habits tend toward “a little here and a little there” rather than large purchases. If you make a lot of small purchases, it can help your rewards increase at a brisk pace without any extra effort on your part.
Read the full review and apply on Citi’s secure website.
Compare the best credit cards with no annual fee
Methodology
All credit cards from our partners are rated with a 5-point scoring system. For cards in this category, we focused on the merits of each selection apart from charging no annual fee. Those specific criteria included:
- Rewards rate and value: To help you get the best returns on your spending, from cash back to travel rewards
- Redemption options: To highlight cards that let you redeem your rewards in a useful, flexible way
- Extras and discounts: To identify cards that offer retail discounts, insurance coverage and other perks that improve their overall value
- Variable APR: To include cards that offer reasonable interest rates in case you carry a balance
What is an annual fee?
Just as you would expect, an annual fee is a yearly charge that you have to pay to own a credit card. Think of the fee as payment for having access to the benefits of a particular card, which may include:
- Cash back or travel rewards earned through eligible purchases
- Travel perks, such as priority boarding, free flights or free hotel stays
- A sign-up offer providing bonus points, miles or cash back
- Special discounts at retailers and restaurants
Industry experts point out that annual fees help credit card issuers pay the cost of providing rewards programs in the first place. In turn, the rewards programs create an incentive for customers to use their cards more often.
However, choosing a card without an annual fees doesn’t necessarily mean missing out on rewards. A number of credit cards that don’t charge annual fees offer rewards programs, travel perks and other items of value — just on a smaller scale.
Is an annual fee worth the money?
The answer depends on the card, as well as the cardholder.
A creditcards.com survey found a typical range of annual fees from $25 to $450, although premium credit cards could charge even more. Large annual fees are often associated with high-rewards credit cards aimed at big spenders and business owners. They tend to offer the same kind of benefits as no-annual-fee cards, just on a larger scale.
As an example, consider The Business Platinum® Card from American Express. The $595 annual fee (See Rates and Fees) may be eye-popping, but the tradeoff includes a tiered welcome offer (up to 75,000 Membership Rewards® points after a total $20,000 spend in the first 3 months) and a rewards rate per dollar spent (5X points on certain qualifying travel expenses through amextravel.com) much bigger than what you find with most no-annual fee cards.
At the same time, many credit cards offer rewards programs, travel perks and other items of real value without charging a yearly fee. Among the top-selling cards offered through Bankrate.com, the majority consistently have no annual fee. Most of the rest typically offer to waive the fee for the first year.
With any credit card, whether the benefits justify the expense of an annual fee is up to the consumer. A credit card with no annual fee is an economical choice, and you don’t necessarily have to sacrifice rewards and perks if you choose carefully.
Do your own cost-benefit analysis of annual fees
The following tips can help you figure out how the benefits of an annual credit card fee stack up against the costs:
- Look at the other fees. Check the terms and conditions to find out how much the card charges for balance transfers, cash advances and late payments. An annual fee isn’t the only charge that could chip away at your investment in the card.
- Look for limitations in the rewards program. Some cards put a cap on earnings and set expiration dates on points and miles.
- Check out rewards transfer partners. When it comes to transferring rewards to hotel and airline loyalty programs, each credit card has a specific list of approved partners. If your loyalty programs don’t appear on the list, you’ll get limited value out of the card.
- Beware of “chasing rewards.” Using a credit card excessively just for the sake of earning more points or miles can start you down a dangerous financial path. Don’t let the pursuit of credit card rewards lead you to spend beyond your means.
- Evaluate the cards you already have. Most customers who already own a 3% cash back gas card probably don’t drive enough to justify getting a second one.
Will credit cards waive the annual fee?
It’s possible. People can and do negotiate annual fees and other charges with their credit card providers.
The ideal situation would involve a cardholder calling a customer service representative to ask — politely — about getting a break on the annual fee. If the company aims to retain longtime customers who use their cards frequently, the answer might be yes.
Even if the credit card issuer won’t budge, you could downgrade your card to a no-annual-fee version. It would likely mean missing out on a higher rewards rate and some perks, but depending on how much you use the card you might not notice the difference.
A potential customer who hasn’t actually signed up for the card probably won’t have the same leverage. Still, you’ll never know what you might get if you don’t ask.
No annual fee credit cards linked to customer satisfaction
In general, credit cards that charge annual fees tend to have bigger sign-up bonuses, higher credit limits and more lucrative perks. So, are credit cards with annual fees better than cards without annual fees?
The typical consumer might say no.
A 2019 survey by Discover suggests that consumers are more likely to have a satisfying experience with a no annual fee card:
|
Annual fee cards |
No annual fee cards |
| Consumers “very satisfied” with their credit cards |
35% |
70% |
Source: Discover Financial Services
In another recent survey by Bankrate, 28% of those who responded said they had canceled a credit card because the annual fee was too high. Most of the top-selling cards currently offered through Bankrate.com, which include cash back rewards cards, have no fixed annual fee or offer to waive the fee for the first year.
At the same time, certain consumers with specific needs could find an annual fee worth the expense. Consider the Gold Delta SkyMiles® Credit Card from American Express. This card lets you check your first bag free on Delta flights, a perk that could more than pay for the $95 annual fee (which is waived the first year) after a handful of round-trip flights. For a frequent business, the checked bag benefit by itself might outweigh the annual fee.
With any credit card, it’s up to the consumer to decide whether the benefits justify the expense of an annual fee. We aim to help ensure the decision you make is an informed one.
Pros and cons of credit cards with no annual fee
Pros:
- It’s economical. It’s not unusual for annual credit card fees to run in the $25-$100 range, with some elite-level cards charging even more.
- It doesn’t have to mean settling. The right credit card can give you many of the benefits of a premier card — including rewards programs, sign-up bonuses, travel-related perks and more — minus the annual fee.
- It’s one fewer thing you have to budget for. Everybody has to pay fees or charges for any number of things, from homeowners’ associations to gyms. A credit card with no annual fee lightens the burden, even if just a little.
Cons:
- In some cases, the annual fee is the price of admission to higher-end perks. With a business credit card, for instance, an annual fee may be a trade-off for providing a much higher credit limit than a personal consumer card.
- Generous perks and rewards can offset the annual fee. One example is the Blue Cash Preferred® Card from American Express, which has a $95 annual fee (not waived). If you max out the 6% cash back rewards at U.S. supermarkets ($6,000 per year, then 1%), you earn $360 in Reward Dollars you could use for a statement credit.
- You may overlook the overall benefits by focusing on the annual fee. If you look past the $550 annual fee for the Chase Sapphire Reserve, you’ll see that the sign-up bonus (50,000 bonus points when you spend $4,000 in the first three months of opening your account) has considerable value. Even after that welcome bonus is a memory, you’ll still have the $300 travel purchases statement credit every year, 3X points on dining and travel worldwide and other benefits with real monetary value.
Four questions to ask as you consider annual fees
When it comes to credit cards, no-fee might seem like a no-brainer. However, take a closer look and you’ll see that certain situations might be more or less ideal for a no annual fee credit card, depending on the individual cardholder.
1. Is it your first credit card?
When you have a rewards card that charges an annual fee, you’ll probably worry about using it enough to justify paying that yearly charge. For credit card rookies, trying to nail down the break-even point can be a confusing hassle. You might have a better experience learning the ins and outs of credit cards without the added factor of calculating cash back, points or miles vs. an annual fee. Waiting until you have a comfortable grasp of the basics and then taking the next step would be a simpler approach.
2. What are your priorities?
For some cardholders, the true value of credit cards lies in their convenience instead of their potential for rewards. Not everyone has the same interest in cash back or travel miles, or the willingness to balance them against an annual credit card fee. There’s nothing necessarily wrong with having a credit card for the simple reason that it’s often easier than paying with cash or checks. If that reasoning appeals to you, an annual fee probably seems like an unneeded complication.
3. Can you ‘test-drive’ it?
Some cards waive the annual fee for your first year as a cardholder. That offer could present the chance to try out the card and decide later whether the annual fee is worthwhile. Also, it may be possible to downgrade your card or eliminate the annual fee by negotiating with your credit card issuer.
4. How much do you spend, and where?
If you spend heavily and the annual fee card you’re considering offers unlimited rewards or high-rewards rates on the categories that your spending is concentrated on, then it’s probably going to more than pay for itself. When shopping for a credit card, make sure to have studied your statements so you know how much you normally spend.
It’s up to you to do the math on whether the annual fee is worth the value you get from the card in your unique circumstances.
Other credit card fees, from obvious to obscure
Aside from the annual fee, there are other credit card fees to keep a lookout for. Most are clearly stated in the advertising and the terms and conditions, but other fees may be less obvious.
- Balance transfer fee: A fee that’s applied when you attempt to move a balance from one credit card to another. It’s usually either $5 or 3% of the transaction amount – whichever is greater.
- Cash advance fee: A fee that’s applied when you borrow money against your card’s credit limit. It’s typically $10 or 5% of the amount transferred, whichever is greater.
- Foreign transaction fee: A fee that’s applied when you make a transaction outside the U.S. or you use your card for foreign currency. This fee varies by issuer but is usually around 3% of the purchase price.
- Late fee: A fee for missing the minimum credit card payment due date. It’s usually $25 to $39 but could increase if monthly payments continue to be late.
- Paper statement fee: While many issuers encourage you to adopt paperless billing, some will actually penalize you for not going green by charging a small monthly fee.
- Reward redemption fee: Some cards may charge you a fee when you redeem your rewards, usually when it involves airline miles. You could expect to pay $20 to $50.
How to solve ‘mystery fees’
Don’t go to the trouble of choosing a card with no annual fees just to wind up scratching your head if your first monthly statement includes fees you don’t recognize. The Consumer Financial Protection Bureau (CFPB) offers several tips on how to stop mystery fees.
Additional research and credit card reviews
Bankrate credit card resources cover a wide range of products for a wide range of consumers. Check out these reviews for more information about highly rated credit cards available from our partners:
Senior Editor Barry Bridges has been writing about credit cards, personal loans, mortgages and other personal finance products since 2017. Before joining Bankrate, he was an award-winning newspaper journalist in his native North Carolina. Send your questions about credit cards (and fantasy baseball) to bbridges@bankrate.com.
Have more questions for our credit cards editors? Feel free to send us an email, find us on Facebook, or Tweet us @Bankrate.
