Best No Annual Fee Credit Cards
April 2024
If you are not a frequent traveller or you have a card that doesn't offer many benefits, you may be wasting your money on annual fees. Rather than waste money paying for something you might not use, consider a credit card with no annual fees.
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Credit cards can be one of the best tools in your financial arsenal. Many offer rewards for everyday purchases, and you can redeem rewards for statement credit, cash rewards, and more. However, those rewards cards often come with annual fees.
Although premier rewards program credit cards can be an attractive option, credit cards with no annual fees can also be a good option to consider. If you don't want to pay an annual fee, or only plan to use your card occasionally, cards with no annual fee can be a great choice.
Here is SuperMoney's list of the best credit cards with no annual fee.
What is a no-annual-fee credit card?
A no-annual-fee credit card is one that does not charge a yearly fee to have the card itself. While some credit cards charge an annual fee in order for customers to receive rewards on things like purchases, benefits, and perks, no-annual-fee cards, others offer these perks at no additional charge.
No-annual-fee credit cards can help reduce your cost of credit while offering a variety of rewards as well as other perks and benefits. These cards also come with lower interest rates than cards that charge an annual fee, which is beneficial for those looking to build or rebuild their credit history.
Pros and cons of no-annual-fee credit cards
There are both positives and negatives to holding a no-annual-fee credit card. Depending on the consumer and what they are looking to get out of the card, there may be more checks in one category than the other. When considering the best no annual fee card for you, it's important to consider things like APR rates, reward programs, and hidden fees.
Who should get a no-annual-fee credit card?
A no-annual-fee credit card can be a useful financial tool for a variety of consumers. Whether they are new credit card users or those looking to get a handle on their debt, no-annual-fee credit cards can be worthwhile additions to your wallet.
New credit card users
For those who haven't had a credit card before and are looking to dip their toes into the world for the first time, a no-annual-fee credit card is a great place to start. Because there is no annual fee, you only pay the balance on your card.
It's also easier to get approved for a no-annual-fee credit card as opposed to other cards, which can sometimes be a challenge if you don't have a credit history.
Credit builders and rebuilders
A no-annual-fee credit card is also helpful for those looking to both build and rebuild their credit because of the no annual fee. Since you're only paying the balance of the card, you don't have to worry about making annual payments, which allows you to use the card when you want without feeling guilty that you aren't using it enough.
For those looking to rebuild credit, no-annual-fee cards are especially useful for your overall credit health. You can use them to help pay off debt, and using one responsibly can help get your credit score back on track if it's gotten too high.
Debt managers
No-annual-fee credit cards can help manage debt, and even help you get out of it if used responsibly. Many no-annual-fee credit cards have introductory offers that include 0% APR on all purchases for at least the first year of use, if not longer. If your debt is related to high interest rates, this can take that off your plate for a period of time.
Balance transfer credit cards can also help manage your debt, as these cards also offer a 0% APR period as well. During this time, you can focus on paying down your debt instead of worrying about accruing interest on unpaid monthly bills.
Experienced cardholders looking to diversify
A no-annual-fee credit card is a low-risk option for experienced credit card holders who are looking to diversify their wallets. Credit cards with no annual fee can be used for simple, everyday purchases at places like grocery stores and gas stations while still providing benefits like cash rewards.
If you're an experienced cardholder with a credit card that has annual fees, holding onto a no-annual-fee credit card can make sense. For example, if you opened a no-annual-fee credit card as your first card and are looking into opening one that does have annual fees, closing a credit card might preclude you from other offers, such as account opening bonuses and bonus cash.
How to choose the best no-annual-fee credit card
There are so many credit cards on the market, that it can often be difficult or overwhelming to find the one best suited to your lifestyle and spending habits. When seeking the best no-annual-fee credit cards, it's worth keeping some of these questions in mind.
What are your spending habits?
Knowing your spending habits and having an understanding of them are important things to consider when looking for the best no-annual-fee credit cards. Do you prefer cards that offer cash rewards or other bonus categories? Or are you more fond of cards that allow you to redeem cash for statement credit? On the other hand, maybe your spending habits benefit more from a card that offers unlimited cashback match and low fees on purchases and balance transfers.
Having an idea of which spending category you fall into, and what your purpose is for using the card, can help you make the most informed decision for you.
What benefits and rewards do I need?
Some no-annual-fee credit cards have higher rewards rates and options than others. There are travel credit cards, cards offering high amounts of cash rewards, and those that help build or rebuild your credit history.
Knowing what types of benefits and rewards you need can help you in deciding what the best no-annual-fee credit card is for you.
Do the rewards compensate for not having an annual fee?
Credit cards that come with an annual fee often have more desirable perks and rewards programs than cards with no annual fee. Therefore, it's important to think about what you're looking to get out of the rewards programs, and if it compensates for not having an annual fee.
Having a card with no annual fee can help with building and rebuilding credit, managing debt, and creating a credit history. They also offer sign-up bonuses and introductory periods of 0% APR.
How to maximize your no-annual-fee credit card
When used responsibly, a no-annual-fee credit card can be a great addition to your financial toolbox. To maximize your use of the card, it can be helpful to keep some of these tips in mind.
Pay your balance
Paying your card's balance in full each month not only helps your credit score terms but also allows you to take the most advantage of your card's low ownership costs. Once the introductory 0% APR offer ends, you'll start accruing interest on any unpaid balances each month, which can quickly add up.
Keep the card open if you upgrade
By keeping your no-annual-fee credit card account open when you upgrade to a newer credit card, you can improve your credit history and credit utilization. Since there's no annual fee for the card, as long as the balance is paid off you can leave it open on your account with no negative effects on your credit history.
Pair with a rewards credit card
Pairing your no-annual-fee credit card with a rewards credit card can help you earn maximum rewards on everyday purchases. Since credit cards that do charge an annual fee often earn more rewards, using a no-annual-fee card with one of these can give you the benefit of low fees with high rewards.
Are credit cards with annual fees ever worth it?
Credit cards with annual fees typically offer greater rewards programs and more benefits compared to credit cards with no annual fee. However, that doesn't mean paying for a credit card is always worth it.
When it’s worth the fee
If you're looking to maximize the amount of rewards you want to receive, it can be worth paying for an annual fee credit card. The rewards benefits and additional perks of holding the card can have long-term value, especially when it comes to things like travel and presale tickets for events.
When it’s not worth the fee
If you are struggling with debt, don't have a credit history, or need to rebuild your credit, it's generally not a good idea to get an annual-fee credit card. Having to pay a fee can make you feel obligated to use the card more often, which in turn could cause you to spend more than you should.
Also, if you struggle with debt due to high interest rates, getting an annual-fee credit card can put you even further in the hole if you miss payments or make late payments on your monthly bill.
How we chose our top no-annual-fee credit cards
When choosing the best no-annual-fee credit cards for this list, we considered only the top-rated cards. We looked at rewards rates, redemption options, bonus categories, APR rates, and more to bring you the best credit card options possible.
Rewards rate and value
Not all rewards options for no-annual-fee credit cards are created equal. Some cards offer cash rewards for everyday purchases across the board, while others only offer rewards on certain purchases from certain types of merchants.
The types of rewards offered and the value you're getting for them are important options to consider when choosing the best no-annual-fee credit card for you.
Redemption options
How you can redeem rewards is another important factor we thought about when compiling this list. Some cards offer rewards that you can only redeem for statement credit, while the best no annual fee cards allow you to redeem rewards in more flexible and useful ways.
Extras and discounts
Some cards offer the ability to gain discounts from certain stores or merchants, which can be a big bonus if you spend money at those types of places. There are also potential discounts on things like insurance and other expenses you don't necessarily associate with credit card rewards.
Variable APR
Flexible APR rates are a bonus if you can't pay off the entirety of your bill in a given month and must carry a balance for a period of time. Having low interest rates can make your balance easier to pay off and keep it from ballooning to a larger sum that might grow difficult to pay for.
About the Author
SuperMoney
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