Best no annual fee credit cards
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You don’t have to pay a high annual fee to earn a big return on a rewards credit card. As proof, our three best no annual fee credit cards offer an impressive amount of cash back, miles or points.
To help you pick the best no annual fee card for your wallet, CreditCards.com evaluated some of the top-rated cards and asked a panel of judges to rate the CreditCards.com staff’s top three picks.
Judges for the Best No Annual Fee Credit Card were personal finance expert Holly Johnson (clubthrifty.com), personal finance blogger Jonathan Ping (mymoneyblog.com), personal finance journalist Lisa Gerstner, CreditCards.com Editor-in-Chief Daniel P. Ray and CreditCards.com senior industry analyst Matt Schulz.
First Place: The Citi Double Cash card
Other features: Citi Price Rewind, purchase protection, trip cancellation and interruption protection
The Citi Double Cash card, a longtime favorite of personal finance writers, won first place in our no annual fee card contest.
One of the more unusual rewards cards on the market, the Citi Double Cash card routinely earns plaudits from personal finance writers for its generous rewards rate and unique incentive for paying your credit card bill in full.
“Given that most cardholders have a clear preference for cash back rewards with no annual fee, Citi Double Cash may be the most broadly appealing card on the market,” says personal finance journalist Lisa Gerstner. “Its total rate of 2 percent cash back on all purchases is the best you’ll find on a widely available cash back card that carries no annual fee.”
To earn the Citi Double Cash card’s highest rewards rate – 2 percent cash back – you have to pay off the purchase in full. Otherwise, you’ll earn 1 percent cash back until you do.
In so doing, the Citi Double Cash card amply rewards cardholders who use their cash back card as a payment tool rather than a loan.
Judges also liked that the Double Cash card has a simpler rewards structure than many of its competitors.
“It’s just a simple set-it-and-forget-it card that fits into most anyone’s busy lifestyle,” says CreditCards.com senior industry analyst Matt Schulz. “There’s no minimum spending threshold to meet, no rotating categories to chase. It’s just 2 percent on anything you buy, anywhere and anytime you buy it. That’s a tough combination to beat.”
The Citi Double Cash card also won points from judges for its consumer-friendly terms and lengthy promotions.
“It offers a 0 percent annual percentage rate for the first 15 months, meaning that if you have a large purchase on the horizon, you may be able to finance it interest-free with the card,” says Gerstner. (Note: The introductory period has increased to 18 months since this story was written.) In addition, “if you miss a payment, Citi won’t charge you a late fee for the first offense.”
The Citi Double Cash card also comes with important consumer protections and insurance products as cardholder perks, adds personal finance expert Holly Johnson. “Some of the most lucrative benefits offered include Citi Price Rewind, trip cancellation and interruption coverage, and travel accident insurance. These protections are free just for being a cardholder."
The Citi Double Cash card doesn’t offer a sign-up bonus, though, so you won’t earn nearly as much in the first year as you would with other cards.
“Some other cards hand over hundreds of dollars in extra rewards if you spend a specified amount in the first few months of card membership,” says Gerstner. “But if you’re playing the long game, Citi Double Cash is a deserving contender for a place in your wallet.”
Second Place: The Discover it Miles card
Other features: No foreign transaction fees, no late fee on your first late payment, $30 in in-flight Wi-Fi credits
The Discover it Miles card won second place in our best no annual fee card contest. Our judges praised its hassle-free rewards program and generous promotion in the first year.
If you plan to use your rewards for travel, the Discover it Miles card is one of the most generous no annual fee cards you can get – especially in the first year. The travel card offers a flat 1.5 miles for every dollar you spend and then doubles your first-year earnings.
“That brings your total annual earnings to 3 percent, which is pretty sweet,” says Johnson.
For example, if you spend $1,500 a month in the card’s first year ($18,000 for the year), you could end the year with enough miles to purchase a $540 airline ticket.
“The downside is, the double bonus is only good the first year,” says Johnson.
The card, though, waives late payment fees after the first late payment and doesn’t charge a penalty rate, making the Discover it Miles card a safer choice for cardholders who may occasionally miss a payment.
The Discover it Miles card is a good value, our judges say, particularly since you can use the card to pay for any kind of travel expense and simply get reimbursed for it. Unlike many travel cards, Discover doesn’t make you go through the card issuer to book your rewards-funded travel.
“Those looking for a versatile rewards card with no annual fee can’t go wrong with the Discover it Miles card,” says CreditCards.com Editor-in-Chief Daniel P. Ray. “With double miles in the first year, you can get a big head start on that dream trip of yours.”
Third Place: Hilton Honors card from American Express
Other features: Automatic silver status, 15% bonus on Honors points
The Hilton Honors card from American Express, which our judges described as a great card for everyday purchases, won third place in our best no annual fee card contest.
If you spend a lot of time staying in hotels but don’t want to fork over an annual fee for a hotel card, the Hilton Honors card is one of the best hotel cards you can get, our judges said. The card offers an exceptional rewards rate on everyday purchases, including seven points for every dollar spent on Hilton hotel purchases, five points for every dollar spent on gas, supermakets and restaurants within the U.S., and three points for every dollar spent on general purchases.
The Hilton Honors card from American Express also offers a generous 50,000-point sign-up bonus if you charge $1,000 in the card’s first three months.
The downside: The Hilton card’s rewards points aren’t worth nearly as much as the average credit card rewards point, so the card’s extra high rewards rate is somewhat inflated. But judges say the Hilton Honors card is still a good value for regular hotel guests who plan to use their card for everyday purchases and want to earn additional free night stays.
“If you are a frequent guest at Hilton hotels, the Hilton Honors card can’t be beat,” says Ray. “The rewards rate is the tops in the field, allowing you to amass big points with everyday spending.”
This is the second year that CreditCards.com has held a contest for best cards in their class and the first time that we’ve held a contest for best no annual fee card.
To help choose the best cards for each category, the CreditCards.com staff consulted credit card and personal finance experts and nominated the top three cards as finalists. CreditCards.com staff also rated cards through its credit card reviews program.
A panel of five judges – including credit card and personal finance experts and two members of the CreditCards.com staff – were asked to independently judge the three finalists and rank them in order of preference. The card with the best average rank was chosen as the winner.
All best credit card stories are prepared by CreditCards.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including card rates and fees, presented in the story is accurate as of the date of the story. Check the credit card terms and conditions link on the issuing bank’s website for the most current information.