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A guide to credit cards with no annual fee
Credit cards without an annual fee offer much-appreciated savings, a hassle-free experience and, often, standout benefits. In fact, the majority of our picks for the best credit cards have no annual fee.
“Yearly fees prevent consumers from buying what they really want,” says Julie Pukas, head of U.S. Bankcard and Merchant Solutions at TD Bank. The bank’s 2020 Retail Experience Index found that millennials are making an average of 1.5 more major purchases annually than other generations.
“Some consumers may save their credit card rewards points so that they can pay off their annual fee,” Pukas says. “By switching to a card with no yearly fee, they can put those rewards to something they really want, like flights, dining out and more.”
The trick is to identify whether a no annual fee card suits your lifestyle. Here, we look at:
Comparing the best credit cards with no annual fee
|Credit Card||Best for||Annual fee||Our rating|
|Wells Fargo Active Cash℠ Card||2% cash rewards||$0||3.6 / 5|
|Citi Custom Cash℠ Card||Automatically maximizing rewards||$0||4.1 / 5|
|Bank of America® Unlimited Cash Rewards credit card||Bank of America card for flat rate cash back||$0||3.3 / 5|
|Bank of America® Customized Cash Rewards credit card||Customized rewards categories||$0||4.2 / 5|
|Discover it® Cash Back||Rotating cash back categories||$0||4.5 / 5|
|Capital One SavorOne Rewards Credit Card||Dining and entertainment||$0||4.0 / 5|
|Chase Freedom Unlimited®||Flat-rate cash back + sign-up bonus||$0||4.5 / 5|
|Capital One Quicksilver Cash Rewards Credit Card||New cardholders||$0||3.0 / 5|
|Chase Slate Edge℠||Intro APR on balance transfers||$0||3.4 / 5|
|Blue Cash Everyday® Card from American Express||U.S. gas and U.S. supermarkets||$0||3.9 / 5|
|Chase Freedom Flex℠||Rewards variety||$0||4.2 / 5|
Editor’s picks: No annual fee credit card details
Wells Fargo Active Cash℠ Card: Best for 2% cash rewards
Why we picked it: This simple, yet flexible rewards card offers an unlimited 2% cash rewards on eligible purchases. It also comes with an introductory bonus of $200 in cash rewards after spending $1,000 within the first three months of account opening. Members can enjoy a 0% introductory APR on purchases as well as qualifying balance transfers for 15 months from account opening, then 14.99% to 24.99% variable APR.
Pros: Rewards are widespread and never expire so long as your account remains in good standing.The card also charges no annual fee. Card perks also include Visa Signature Concierge benefits at select hotel properties around the world and $600 in cellphone protection for damaged or stolen equipment as long as you pay your cell phone bill with this card (subject to a $25 deductible).
Cons: Cardholders may be better served if they pair it with a card that features bonus categories in order to maximize reward earning potential. Timeliness is a factor as well, as the intro APR on qualifying balance transfers must be made within the first 120 days as a cardholder to receive the special intro rate. There’s also a balance transfer fee of 3% if you transfer the balance within 120 days; 5% if you don’t (with a $5 minimum).
Who should apply? If you’re looking for a card that can set the foundation for your rewards-earning journey as well as offer forgiving balance transfer terms, the Wells Fargo Active Cash℠ Card is a very compelling option.
Who should skip? This is a great way to earn on everyday spending but you may be missing out on a higher rewards rate in certain spending categories, depending on what your biggest monthly expenses happen to be. If you’re ok with a little strategizing if it means earning more rewards, you may find another card to be a better fit.
Read our Wells Fargo Active Cash Card review.
Citi Custom Cash℠ Card: Best for automatically maximizing rewards
Why we picked it: For no annual fee, you can take advantage of a competitive cash back rewards program, earn a lucrative sign-up bonus and enjoy a lengthy 15-month 0% introductory APR on balance transfers and purchases (then variable 13.99% to 23.99%).
Pros: You earn 5% cash back on up to $500 in purchases each billing cycle in your top spending category (then 1%) and 1% cash back on all other purchases. Eligible spending categories include restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs and live entertainment. But perhaps the biggest boon is that there’s no enrollment or tracking required. Your earnings adjust automatically each billing cycle. You can also earn $200 when you spend $750 in the first three months of account opening, awarded as ThankYou points, which can be redeemed for cash back.
Cons: The cash back cap on 5% earnings (up to $500 in purchases each billing cycle, then 1%) puts a ceiling on the card’s value. If you do a balance transfer, you’ll pay a 5% balance transfer fee (or $5, whichever is greater), which is on the pricier side. Many cards charge 3% of the transferred balance; some waive the fee.
Who should apply? This no annual fee card fires on a lot of cylinders, so if you’re looking for the combo of cash back, a lucrative sign-up bonus and a promotional APR, consider it a top contender.
Who should skip? Depending on your spending habits, the fact that you only earn a high rewards rate in your top spend category means you may be missing out on big rewards in your second and third top spending categories.
Read our Citi Custom Cash Card review.
Bank of America® Unlimited Cash Rewards credit card: Best Bank of America card for flat rate cash back
Why we picked it: This new card offers a lucrative sign-up bonus of $200 in online cash rewards after making at least $1,000 in purchases in the first 90 days of account opening. If you’re an existing Bank of America customer with assets in eligible savings, checking or investment accounts, you could benefit from this cash back credit card, which offers 1.5% back on all purchases, and a potential 25% to 75% rewards boost for Preferred Rewards members (actual value of the boost varies, depending on how much you have in your Bank of America accounts).
Pros: In addition to the unlimited 1.5% cash back on eligible purchases, you can earn $200 online cash rewards after making at least $1,000 in purchases in the first 90 days of account opening. Cardholders can also take advantage of a promotional APR (0% intro APR on purchases and balance transfers made in the first 60 days for 15 billing cycles, then 13.99% to 23.99% variable APR) and requires no annual fee.
Cons: You’ll need at least $20,000 across Bank of America and/or Merrill accounts to be eligible for any Preferred Rewards boost. If you carry a balance beyond the introductory 15 billing cycle period and you could end up paying quite a bit in interest, particularly if you fall under the higher APR range.
Who should apply? Existing Bank of America customers with at least $20,000 across savings, checking or investment accounts will see a lot of utility from the rewards boost the bank offers through its Preferred Rewards program.
Read our Bank of America® Unlimited Cash Rewards credit card review.
Bank of America® Customized Cash Rewards credit card: Best for customized rewards categories
Why we picked it: This Bank of America Customized credit card has an unique feature: Cardholders can choose their big bonus category: Earn 3% cash back on gas, online shopping, dining, travel, drug stores or home improvements or furnishings. You’ll also earn 2% cash back at grocery stores and wholesale clubs (up to $2,500 a quarter on combined 3% and 2% categories, then it’s 1%).
Pros: You can change your customized rewards category each calendar month. The required spend on the sign-up bonus is quite low: Get a $200 online cash rewards bonus after spending $1,000 within the first 90 days of opening your account. This card offers a 0% intro APR on both purchases and balance transfers made in the first 60 days of card membership for 15 billing cycles, then there’s a regular interest rate of 13.99% to 23.99% variable.
Cons: Your bonus rewards are subject to that quarterly $2,500 cap. Plus, if you want to make purchases and earn rewards without having to worry about which card to pull out, you may want to consider another card. There are no annual fee flat-rate cash back cards with 1.5% or even 2% cash back on the market.
Who should apply? This card is a solid option for Bank of America and Merrill customers with at least $20,000 across checking, savings or investment accounts as they can qualify for a 25% to 75% rewards boost through the Bank of America Preferred Rewards program. It’s also an option for people that want a rewards program that can shift alongside their spending.
Who should skip? The earnings cap on bonus rewards means big spenders can earn more elsewhere.
Read our Bank of America Customized Cash Rewards credit card review.
Discover it® Cash Back: Best for rotating cash back categories
Why we picked it: This popular Discover credit card offers a whopping 5% cash back on up to $1,500 in quarterly purchases in various rotating categories throughout the year (enrollment required, then 1%). See Discover’s 2021 Cash Back calendar.
Pros: This card’s cash back match feature at the end of your first year can easily beat out other cash back cards’ sign-up bonuses. For example, while you would only get $200 back from the Capital One Quicksilver after a $500 spend within the first three months of card membership, you could potentially get $600 back the end of your first year with the Discover it Cash Back if you enroll quarterly and max out your 5% rotating category offer ($1,500 max spent each quarter you activate comes to $75 back each quarter (then 1%), $300 at the end of the year, then matched by Discover for a total of $600). Then earn an unlimited 1% on all other purchases.
Cons: If it’s not your idea of fun to chase rotating categories, this isn’t the best choice for you. Not only do you need to keep track of which categories are active, but you have to sign up each quarter to activate the bonus earnings.
Who should apply? Rewards maximizers will welcome the opportunity to earn a large amount of bonus cash back on rotating categories.
Who should skip? If the tedium of having to enroll and keep track of spending categories puts you off, a flat-rate rewards card may be more your speed.
Read our Discover it Cash Back review.
Capital One SavorOne Cash Rewards Credit Card: Best for dining and entertainment
Why we picked it: This popular Capital One credit card just got a bit of a makeover: Cardholders now earn 3% cash back on dining and entertainment, 3% cash back at grocery stores (excluding superstores like Walmart® and Target®), 3% cash back on popular streaming services and 1% cash back on general purchases.
Pros: There’s a welcome bonus of $200 after you spend only $500 in the first three months of opening your account. That’s more than competitive in the realm of cash back cards’ welcome offers. Plus, it features a 0% intro APR offer on purchases for 15 months (then it’s 15.49% to 25.49% variable).
Cons: The ongoing APR after the welcome period is on the high side. Additionally, although it provides solid earning rates, redemption options are limited with a cash back card.
Who should apply? This is a great card for foodies, given it offers best-in-class cash back on dining and entertainment for a no annual fee credit card. (Learn more about the best cards for restaurants.)
Who should skip? Moderate spenders who rarely dine out may be better off with a single flat rate credit card that doesn’t require keeping track of bonus categories.
Read our Capital One SavorOne Cash Rewards Credit Card review.
Chase Freedom Unlimited®: Best for flat-rate cash back + sign-up bonus
Why we picked it: The Chase Freedom Unlimited combines 1.5% cash back on general purchases with enhanced earnings in select bonus categories. Earn 5% cash back on travel purchased through the Chase portal, 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year and 3% cash back on dining at restaurants and drugstores. You get 1.5% on all other purchases. Also, get an industry-busting $200 after only a $500 spend within the first three months.
Pros: You can also get a 0% intro APR on purchases for 15 months (then it’s 14.99% to 23.74% variable).
Cons: The 15-month 0% introductory APR doesn’t extend to balance transfers. Depending on your spending habits, you could conceivably earn more in the long term with the Citi® Double Cash Card, a no annual fee card that offers 2% cash back on general purchases (1% when you spend; 1% as you pay back those purchases) but doesn’t come with a sign-up bonus.
Who should apply? The Chase Freedom Unlimited is a solid card for people looking for a solid general-purpose cash back card with a generous sign-up bonus.
Who should skip? If you’re considering a balance transfer, this may not be the card for you. It does not have a 0% intro APR offer on balance transfers.
Read our Chase Freedom Unlimited review.
Capital One Quicksilver Cash Rewards Credit Card: Best for new cardholders
Why we picked it: It doesn’t get much simpler than this: Earn unlimited 1.5% cash back on all purchases, no matter where or when you make them. No need to track spending, enroll in bonus categories or deal with complicated cash back redemption. Redeem in any amount, any time.
Pros: The Quicksilver’s unlimited flat cash back rate makes it a great choice for everyday spending, and earning the card’s sign-up bonus should be no trouble. You’ll score $200 after spending just $500 in the first three months.
Cons: The go-to rate after the 15-month 0% intro APR purchase offer ends is high, at 15.49% to 25.49% variable, which means this is not a card you want to carry a balance on.
Who should apply? We like the Capital One Quicksilver for first-time rewards credit cardholders, given the ease of earning and redeeming cash back.
Who should skip? While the simplicity of this card will appeal to many, anyone hoping to maximize reward earnings should look at one of the many other cards offering much higher earning rates.
Read our Capital One Quicksilver Cash Rewards Credit Card review.
Chase Slate Edge℠ : Best for intro APR on balance transfers
Why we picked it: Cardholders wanting to pay down existing debt can enjoy a 0% intro APR on balance transfers for 12 months upon account opening (then 14.99 to 23.74% variable. A 3% balance transfer fee applies, $5 minimum) and automatic consideration for 2% APR reduction after spending $1,000 by their account anniversary, contingent upon timely payments. Upon spending $500 in the first six months (and having a timely payment history), you’ll receive automatic eligibility for a credit line increase.
Pros: For a limited time only, Chase is offering cardholders a $100 bonus credit after spending $500 within the first six months of account opening. If you’re aiming to practice healthy financial habits, Credit Journey and My Chase Plan are helpful tools to set you on the right path.
Cons: For those looking to perform a balance transfer, the 3% fee could prove to be costly. In addition, cardholders do not have access to a real rewards program.
Who should apply? People trying to manage existing credit card debt but aren’t worried about earning rewards can benefit from the potential APR reduction, bonus credits and access to Chase’s digital credit tools.
Read our Chase Slate Edge℠ review.
Blue Cash Everyday® Card from American Express: Best for U.S. gas station and U.S. supermarket purchases
Why we picked it: It’s hard to match the Blue Cash Everyday Card’s 3% cash back rate at U.S. supermarkets (on up to $6,000 in purchases per year, then 1%) without paying an annual fee. If you max out this bonus category, you’ll earn close to $180 cash back per year. Plus, you get unlimited 2% cash back at U.S. gas stations.
Pros: For no annual fee, you get a card with a welcome offer (earn a $100 statement credit after spending $2,000 in your first six months, plus 20% back on Amazon.com purchases on the card for your first six months for up to $150 back) and an introductory APR on new purchases (0% for the first 15 months, then 13.99% to 23.99% variable).
Cons: If you are willing to pay a $95 annual fee (waived for the first year) for the Blue Cash Preferred® Card from American Express, it might be a better choice for the larger family or someone with a sizable commute. Also offering great rewards on regular purchases, the Blue Cash Preferred offers 6% cash back at U.S. supermarkets (up to $6,000 annually, then 1%) and 3% cash back at U.S. gas stations. (Learn how to decide between Amex’s Blue Cash cards.)
Who should apply? We love this card for frugal families due to the lack of an annual fee and the competitive bonus categories for everyday expenses.
Who should skip? If a decent chunk of your budget goes towards groceries (say, more than $3,200), the Blue Cash Preferred® Card may be a better choice as you could recoup the annual fee with your spending.
Read our Blue Cash Everyday Card from American Express review.
Chase Freedom Flex℠: Best for a variety of rewards categories
Why we picked it: You’ll earn 5% cash back on travel purchased through Chase Ultimate Rewards®, 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year, 3% cash back at restaurants and eligible delivery services, 3% cash back on drugstore purchases and 1% on everything else. Plus, you’ll earn 5% cash back on up to $1,500 in combined purchases in rotating bonus categories each quarter you activate.
Pros: In your first year you’ll earn $200 after spending $500 on purchases within the first three months of opening an account.
Cons: After your first year, the earnings potential takes a dip. To decide whether the long-term value fits your lifestyle, you should assess how much you typically spend on restaurants, travel and drug store purchases, keeping in mind that the 5% cash back on travel only applies to travel booked through Chase Ultimate Rewards®. The good news, however, is that there’s no annual fee to worry about offsetting.
Who should apply? People with varied spending habits will enjoy rewards in a bunch of different categories.
Who should skip? This card does not offer a 0% intro APR on balance transfers, so this may not be the best option if you were hoping to pay down debt from another card.
Read our Chase Freedom Flex review.
What is a ‘no annual fee’ credit card?
A no annual fee credit card is a card that doesn’t charge an annual fee. An annual fee on a credit card is a charge made each year. It’s essentially a membership fee. Annual fees are often tacked onto cards that give access to special benefits, like credit-builder cards, rewards cards or luxury options, for example. With the best no annual fee cards, you can take advantage of many of those specialty benefits without the added yearly cost.
Luckily, there are a plethora of great options – in our November 2020 credit card fees survey we found that 74 of the 100 cards we evaluated never charge annual fees. While paying a little extra can get you better rewards rates, sign-up bonuses and other perks, no annual fee options still provide these valuable add-ons. But it may take a little more searching.
Some annual fee cards will waive the annual fee for your first year as a cardholder. But once these charges start occurring on an annual basis to keep your account active, the fees can be daunting. Some cardholders find ways to make up for it through clever spending and earning of rewards, but some annual fee cards can cost $550 or more each year. With the right fit, no annual fee cardholders can take advantage of surprising rewards without that yearly cost.
Who should get a no annual fee credit card?
- New credit card users: If you’ve never held a card before, you might want to jump in with a card that has no annual fee until you better understand the market. That way, you can get in the habit of remembering those monthly payments, keeping track of your expenses and searching for the next upgrade, be it a travel card or a 0% intro APR card.
- People who need to consolidate debt: Do you already hold cards and want to consolidate those balances? Many credit cards offer 0% intro APR on balance transfers, such as the Citi® Diamond Preferred® card, with a 18-month offer for balance transfers made in the first four months (then 13.74% to 23.74% variable).
- People looking to rebuild credit: Similar to new card users, those looking to rebuild their credit can benefit from a no annual fee card. Some options are available to people with bad credit scores and have features to help you reestablish your credit. Plus, avoiding the cost of an annual fee can make budgeting easier, giving you more leeway to improve your credit score through timely monthly payments.
- Experienced cardholders looking to diversify: Cardholders carrying a top-tier card may be able to add some value to their wallet with a no annual fee card. Premier credit card rewards are often tied to specialized categories such as travel, so a general-purpose rewards card with no annual fee that you can use for everyday purchases could come in handy.
- Occasional credit card users: If you plan to use your card only occasionally, a card with no annual fee is the most economical choice. With a card that charges an annual fee, you would need to spend a certain amount every year to make it worth your while. A no annual fee card is not only cheaper but simpler.
Learn how to choose the right credit card for you.
Is it worth getting a card with an annual fee?
Putting it simply, yes, an annual fee can be worthwhile. To know if a credit card’s annual fee is worth it, you’ll have to take a close look at a card’s features and decide if the rewards and benefits will justify paying a fee. Doing this can require a little extra work, but there are a few factors you can key in on when considering annual fee cards:
- Sign-up bonus: Cards with annual fees often come with lucrative sign-up bonuses that can eclipse the fee in the first year. Consider the affordability and value given with any card’s sign-up bonus to get a gauge on whether it’s a worthwhile option, but you can’t expect to get a huge bonus every year to offset the annual fee – be sure other features make the card a good fit in the long term. (See the cards with the best sign up bonus offers.)
- Ongoing rewards and bonus categories: Cards with annual fees often feature higher ongoing rewards rates or unique bonus categories that can help offset a fee even after year one. If your spending habits align well with a certain card’s bonus categories, it could be the winning ticket. A card giving heightened rewards on your largest expense categories may pay for itself and then some.
- 0% intro APR: Does the annual fee card have an enticing 0% intro APR offer? If so, it’d be a rarity: Of the 100 most popular credit cards studied in our 2021 Balance Transfer Survey, 36 offered 0% intro balance transfer APR deals and only two were premium cards. Surprisingly enough, annual fee cards also tend to offer shorter 0% intro APR terms than their no annual fee counterparts, a crucial feature if you’re looking to move debt or make a large purchase.
- Ongoing interest: Since some annual fee cards may not offer a 0% intro APR or even allow you to transfer to the card, it’s important to compare ongoing interest rates. No annual fee cards’ ongoing APRs can often be lower than their premium siblings, like when comparing the Venture and VentureOne cards, but the ultimate goal is to avoid interest charges altogether, so find an affordable option with personally valuable rewards.
- Free credit score: Many no annual fee cards, such as the Discover it Cash Back card, now offer a free credit score monthly or quarterly without you taking a hit to your credit.
- Perks & benefits: On top of sign-up bonuses and boosted rewards rates, cards with an annual fee often feature unique, high-end perks for cardholders. Many cards offer benefits like airport lounge access or credits for dining, transportation and expedited security screening. Other perks include concierge service in dining, entertainment and travel 24 hours a day, secondary car rental insurance, or roadside assistance for such events as towing, fuel delivery and tire changing. Depending on your lifestyle, these perks alone could help justify the cost of an annual fee.
Which is better: Annual fee or no annual fee?
Realistically, there’s no universal answer. In any case, financial circumstances and lifestyle play a huge part in deciding on the best credit card for you. No annual fee credit cards can be a must when looking for affordability or towards the beginning of your credit building journey, but annual fee options are often the better choice for savvy rewards strategists and big spenders. It may take a deeper dive to find the answer for your situation.
Let’s take a closer look at comparable annual fee cards and their no annual fee counterparts. We’ll highlight options from American Express and Capital One as examples:
|Blue Cash Everyday from American Express||$0||*up to $250 intro bonus/$2,000 spend in first 6 months; 3% back at U.S. supermarkets (up to $6,000 in purchases per year, then 1% after that); 2% back at U.S. gas stations and select U.S. department stores. Terms Apply||15-month 0% intro APR on purchases, then 13.99%-23.99% (Variable)|
|Blue Cash Preferred from American Express||$0 introductory annual fee for the first year, then $95.||**up to $350 intro bonus/$3,000 spend in first 6 months; 6% back at U.S. supermarkets (up to $6,000 in purchases per year, then 1% after that), select U.S. streaming subscriptions; 3% back at U.S. gas stations and on transit. Terms Apply||12-month 0% intro APR on purchases, then 13.99%-23.99% (Variable)|
|Capital One VentureOne Rewards||$0||20,000-mile sign-up/$500 spend in 3 months; 1.25X miles per dollar on every purchase||12-month 0% intro APR on purchases, then 15.49%-25.49% (Variable)|
|Capital One Venture Rewards Credit Card||$95||60,000-mile sign-up/$3,000 spend in the first 3 months; 2X miles per dollar on every purchase||No 0% intro APR offer; ongoing|
17.24%-24.49% variable APR
*Blue Cash Everyday welcome bonus: earn a $100 statement credit after you spend $2,000 in purchases within the first 6 months of card membership and earn 20% back on Amazon.com purchases on the card in the first 6 months, up to $150 back.
**Blue Cash Preferred welcome bonus: earn a $150 statement credit after you spend $3,000 in purchases within the first 6 months of card membership and earn 20% back on Amazon.com purchases on the card within the first 6 months, up to $200 back.
As you can see, the Blue Cash products have the same ongoing interest but vary on the 0% intro APR offer. On the other hand, the VentureOne has a 0% APR offer, while the Venture does not. Additionally, the VentureOne’s variable interest rate is slightly lower. As expected, the rewards are better on the cards with an annual fee, but it’s worthwhile to read the fine print when it comes to ongoing interest.
While cards with annual fees often have superior benefits, you can save money by avoiding an annual fee if you don’t plan to spend too high of an amount. For example, the American Express options below come within a dollar of each other on a $3,200 annual spend at U.S. supermarkets:
Blue Cash Everyday vs. Blue Cash Preferred…
|Card||Cash back||Total minus ongoing annual fee|
|Blue Cash Everyday from American Express||3% x $3,200=$96||$96|
|Blue Cash Preferred from American Express||6% x $3,200=$192||$97|
As you can see, the two options offer similar value at the $3,200 annual spend mark. But thanks to the Blue Cash Preferred’s strong 6% rewards rate, anyone spending more than $3,200 annually at the grocery store could benefit from paying up the ongoing annual fee.
Read more: our full comparison of the Blue Cash Preferred and the Blue Cash Everyday
Take another example. The Capital One Venture Rewards has a significantly higher rewards rate than the Capital One VentureOne Rewards.
VentureOne Rewards vs. Venture Rewards…
|Card||Cash back||Total minus annual fee|
|VentureOne Rewards||1.25 miles x $12,750=$159||$159|
|Venture Rewards||2 miles x $12,750=$255||$160|
Glancing at the figures above, it seems that $12,750 in annual spend is roughly the breakeven point for the VentureOne versus the Venture. So, if you know your annual budget is less than $12,750 a year, the no-annual-fee VentureOne Rewards is the better pick.
How to pair no annual fee and annual fee cards
You’ve practiced on your no annual fee card, and you feel you have this rewards thing down. Now it’s time to think more strategically. It’s time to look at pairing cards.
The key is finding rewards that complement your current card’s structure. While a no annual fee card can have great cash back rewards on all spending or even specific categories, it may not have the outsized rewards of a travel card. With a travel card, you can get travel and purchase benefits, travel credits, even credits with Uber – all things you likely won’t get with your cash back card. You can even use those extra Uber credits for food delivery!
But if you play it right, you can use the cash back, no annual fee card for all spending, and use the travel card to get a sizable sign-up bonus with your favorite hotel or airline brand – as well as outstanding ongoing rewards for that brand when you’re planning out your next vacation.
For example, the Wells Fargo Cash Wise Visa® card will earn you 1.5% cash rewards on purchases, while the Chase Sapphire Preferred® Card gives you 2X points on travel and dining. Simply use the Sapphire Preferred for those purchases and the Cash Wise for everything else. In addition to the ongoing rewards, the Sapphire Preferred card will earn you 100,000 points after a $4,000 spend within the first three months.
What to do if you’re unhappy with your annual fee card
If you’ve committed to a card with an annual fee and now you’re feeling a bit trapped, there are actually ways to get out of the annual fee without harming your credit.
Downgrade the card
If you’re unsatisfied with the card and perks, instead of closing the card, call the card’s issuer and request a product change to downgrade to a card with no annual fee, advises Chelsea Hudson, personal finance expert with TopCashback.com. This will allow you to skip the annual fee without affecting your credit score.
If you want certain benefits of the older card, such as the credit limit, you’ll want to stay within product groups. So, for example you wouldn’t transition as a downgrade from the Chase Sapphire Reserve to a Southwest card, although you might downgrade to a Chase Sapphire Preferred Card.
When you downgrade, everything transfers to the new card, including account number, credit line, payment history, even length of time you have had the card active. The payment history and length of history are particularly important, because those impact your credit, and by retaining these with a product change, you keep them beyond 10 years on your credit file. Also, by maintaining the credit line, you keep your credit utilization ratio low, provided your balances are low, which is another important part of maintaining a healthy score.
Close the card
If your wallet is weighed down with cards, closing a credit card with an annual fee can be an option. You’ll want to pay off any debt (don’t just transfer it to another card) and make sure you don’t have high debt in your combined cards, because that can impact your credit utilization ratio, and therefore, your credit score. Also, think twice before closing an older card, because your oldest card and your average age are factored into your credit.
Ask for the annual fee to be waived
There’s another little-known option – simply ask your issuer to waive the annual fee. The answer may surprise you. In fact, we found that 70% of consumers who asked successfully had their annual fees waived or lowered. There is no guarantee an issuer will waive your annual fee, but it is definitely worth a shot.
How we picked the best no annual fee credit cards
Research methodology: We analyzed 2,744 no annual fee credit cards to identify the best offers currently on the market. The major factors we considered in our analysis include:
- Rates and fees: Annual fees aren’t the only common costs associated with credit cards. We looked at whether the card touted APRs that were reasonable, relative to the card’s category. We also considered whether it charged industry-standard (or better) foreign transaction fees, late payment fees, balance transfer fees and more.
- Rewards rate: Not all no annual fee credit cards carry rewards as some are designed to assist with other financial goals (like paying off high interest debt via a balance transfer). However, for cards that do offer rewards, we considered whether the return rate was competitive for the category. For instance, many popular cash back credit cards with no annual fee offer 1.5% back on general purchases, so to be competitive in that category, a no annual fee card would need to offer that rate or higher.
- Promotional APRs: Some no annual fee credit cards offer a 0% introductory APR on purchases or balance transfers. If a card touted such an offer, we considered if the length of the promotional offer and any fees associated with it were competitive for that card category.
- Other features and benefits: Many no annual fee credit cards offer sign-up bonuses, certain supplemental insurance, price protection or extended warranties. We factored these and other ancillary benefits when choosing the best no annual fee credit cards.
All criteria used: Rates and fees, rewards rates, sign-up bonus, other promotional offers, redemption options and flexibility, regular APR, extra features and benefits, customer service, credit needed, security, ease of application, ability to upgrade
Additional information on no annual fee credit cards
For more information on all things no annual fee cards, continue reading content from our credit card experts: