Comparing credit cards with no annual fee
Updated: December 4, 2019
Credit cards without an annual fee offer much-appreciated savings, a hassle-free experience and other benefits, say experts. 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. She notes that millennials spend significantly more on dining than other consumers – TD Bank's 2019 Consumer Spending index found that millennials spend annually almost $1,000 more on dining than Baby Boomers and more than $500 than Gen Xers.
"Some consumers may save their credit card rewards points so that they can pay off their annual fee," says Pukas. "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 one suits your lifestyle. Here, we look at:
Best No Annual Fee Credit Cards
Discover it® Cash Back
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 $150 back from the Capital One Quicksilver after a $500 spend within the first 3 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 comes to $75 back each quarter, $300 at the end of the year, then matched by Discover for a total of $600). Then earn unlimited 1% on all other purchases.
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 those categories.
Blue Cash Everyday® Card from American Express
Not only does this card have tiered ongoing rewards that more than compete with other cash back cards, the regular APR starts out quite low at 14.49%-25.49% variable, which kicks in after a solid 0% intro APR offer of 15 months on purchases and balance transfers.
The welcome offer has a high spend of $1,000 after the first 3 months, given the $150 you earn is pretty standard for cash back cards with no annual fee. Also, although the rewards are excellent for 3 key categories, it's only 1% back on everything else.
American Express Cash Magnet® Card
The Cash Magnet is a great card for the shopper who doesn't want to think about which card to use on which purchases – earn 1.5% back on all purchases.
Acceptance for the card isn't strong outside of the U.S. and there is a foreign transaction fee of 2.7% on purchases made during international travel or processed through foreign banks.
Capital One ® Quicksilver® Cash Rewards Credit Card
Unlike Chase Freedom, you don't have to sign up for high-return rewards each quarter and you don't have to keep track of which rewards have the boosted rate.
The go-to variable rate after the 0% offer ends is crazy high, at 15.74%-25.74%, which means this is not a card you want to carry a balance on.
Chase Freedom Unlimited®
This card offers a flat 1.5% cash back rate on all purchases. Then there's its partnership with the higher-end Chase cards, such as the Sapphire Preferred, that makes it a keeper – by transferring Freedom Unlimited rewards to those cards, you can get the boosted rewards the Ultimate Rewards portal offers some cardholders.
The sign-up bonus is on the lower end and there's a foreign transaction fee of 3%.
Capital One® VentureOne® Rewards Credit Card
Like the Capital One® Venture® Rewards Credit Card, the VentureOne Rewards partners with more than a dozen international airlines, including Alitalia and Etihad, yet the VentureOne offers no annual fee.
With a lackluster 20,000 miles bonus after a $1,000 spend within the first 3 months and only 1.25X miles for all spending, the VentureOne Rewards card is really for the occasional traveler who won't be racking up a lot of travel expenses to justify an annual fee.
Wells Fargo Propel American Express® Card
This card has a ton of categories that offer 3x points on purchases: Eating out, flights, hotels, Gas stations, and more. If you spend money in all these different categories, this is a great card to rack up rewards without having to pay an annual fee. Not to mention, there is a sign-up bonus of 30,000 points for spending $3,000 in the first 3 months - that's a $300 cash redemption value.
One of the few down sides of this card is that you cannot transfer your points to other loyalty programs. They must be redeemed through Go Far Rewards.
Citi® Double Cash Card
This card's ongoing rewards are superior to its competitors, and there's no annual fee. In addition, there's a balance transfer intro offer at 0% for 18 months (15.49%-25.49% variable after that).
There's no sign-up bonus with the Citi Double Cash. Also, there's no 0% intro APR offer on purchases.
Bank of America® Cash Rewards Credit Card
The Cash Rewards card offers 3% back on gas or a category of your choice (out of 6 possibilities) and 2% at grocery stores and wholesale clubs for the first $2,500 in combined purchases each quarter. There is also 1% unlimited cash back on all other purchases. The sign-up bonus is $200 after a $1,000 spend within the first 90 days of card membership, which is a relatively low spending requirement.
The 2% and 3% bonus categories have a combined spending limit of $2,500 per quarter. This is low compared to some of the other cards in this category and can limit your cash back depending on your monthly spending.
Wells Fargo Cash Wise Visa® card
The Cash Wise delivers unique features, such as 1.8% back on qualified digital wallet purchases in the first 12 months of your opening your account.
The ongoing rewards and sign-up bonus are only on par with the Cash Wise's competitors, although this card offers some unusual features, such as cell phone protection.
Compare the Best Credit Cards with No Annual Fee
|Credit Card||Best For||Annual Fee||Our Rating|
|Discover it® Cash Back||Low interest||$0||4.3 / 5|
|Blue Cash Everyday® Card from American Express||U.S. Gas and U.S. Supermarket||$0||3.7 / 5|
|American Express Cash Magnet® Card||0% intro APR*||$0||2.9 / 5|
|Capital One® Quicksilver® Cash Rewards Credit Card||New cardholders||$0||3.4 / 5|
|Chase Freedom Unlimited®||Everyday spending||$0||3.8 / 5|
|Capital One® VentureOne® Rewards Credit Card||No foreign transaction fee||$0||3.5 / 5|
|Wells Fargo Propel American Express® card||Travel rewards||$0||3.5 / 5|
|Citi® Double Cash Card||Cash back||$0||3.8 / 5|
|Bank of America® Cash Rewards credit card||Sign-up bonus||$0||3.4 / 5|
|Wells Fargo Cash Wise Visa® card||Balance transfer||$0||3.8 / 5|
*For 15 months, then 14.49% - 25.49% variable APR.
No annual fee credit cards analyzed: 2,744
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
What is an annual fee?
An annual fee on a credit card is a charge made each anniversary year. An annual fee might be charged on a credit-builder card, a rewards card or a luxury card, for example. Typically, you are benefiting in some fashion for having the card, such as when it's a hotel or airline card.
Annual fees can run as low as $25, which the Wells Fargo Secured** card charges, to as high as $995, which the Mastercard® Gold Card™ charges. However, surprisingly few credit cards have an annual fee – only 26 out of 100 surveyed, according to a CreditCards.com study, and about half of the cards with annual fees waive that fee the first year. Heads up that no annual fee cards can be among the highest in other fees – of the 15 cards with the highest number of different fees, 11 had no annual fee.
That said, among those cards with no annual fee, there are some standouts that offer truly impressive value – take a look at our favorites and let us know if you have any questions!
**The information related to the Wells Fargo Secured card has been collected by CreditCards.com and has not been reviewed or provided by the issuer or provider of this product or service.
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
Already hold cards and want to consolidate those balances? There are a host of cards that offer 0% intro APR on balance transfers, such as the Discover it Balance Transfer card, with a 18-month offer for balance transfers (with a variable 13.49% - 24.49% after that).
Occasional credit card users
If you only plan to use your card occasionally, a card with no annual fee is probably best, because you would need to spend a minimum on a card with an annual fee to make it worth your while.
Cards without annual fees can also be easier to get, because they sometimes require a lower credit score. If you need a secured card or a card for bad or fair credit, you'll want to see if there is an annual fee, which can be another cost when cash is short.
Also, while many rewards cards have annual fees, there are some without one, which is ideal if you don't plan to use the card extensively.
Common benefits of a no annual fee card
From the choice in cards to the amount of spending, there are a number of benefits of a card with no annual fee. While the rewards may not be as generous as a card with an annual fee, it's still worth your while to compare. Here are common benefits of cards without annual fees:
In some cases, a travel card with an annual fee might be a better option. That's because the sign-up bonus might be particularly bountiful or the ongoing rewards could be more robust than that of a no annual fee card. For example, the Capital One Venture Rewards offers a 50,000-mile sign-up bonus after a $3,000 spend within the first 3 months compared to the no annual fee VentureOne Rewards, which only pays out a 20,000-mile sign-up bonus after a $1,000 spend within the first 3 months.
Free credit score
Many 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.
Car rental insurance & roadside assistance
Called secondary auto insurance, cards like Chase Freedom Unlimited allow you to use this product as a supplementary item to your primary insurance. Some no annual fee cards also offer roadside assistance for such events as towing, fuel delivery and tire changing.
Purchase protection & price protection
Some cards, offer a program called price protection, which allows you to get a refund for the difference you paid for an item and a lower price found by your card issuer.
Some no annual fee cards such as the Capital One SavorOne Cash Rewards Credit Card, offer comprehensive, personalized assistance in dining, entertainment and travel 24 hours a day.
A favorite among no annual fee cards and products with annual fees alike is the extended warranty. With the many American Express cards, for example, you can get up to 2 extra years warranty of items bought with your card (applies to items with warranties of 5 years or less).
While there are cards available for building credit that have no annual fee, there may be a reason for one with an annual fee, such as the Capital One QuicksilverOne, which has a $39 annual fee, but it accepts fair credit and you can earn 1.5% back on all purchases.
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.
Option 1: 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.
So when is it a good time to downgrade? Here's what the experts told us:
- If you are carrying a high balance, a balance transfer card without an annual fee can be a good choice, says Michael Tamez, investment blogger with Sunshine Gold Investments.
- If you don't use your credit card often, and the annual fee is eating you up, the switch to a card with no annual fee may be the best option.
- If you want the benefits without the fee, says Ben Luthi, financial expert at Student Loan Hero. While you won't get a lot of the same perks that you'd get with a premium credit card, you can still get benefits like a 0% APR promotion on purchases and balance transfers, no foreign transaction fees, price protection, and rental car insurance.
Option 2: Close the card
If your wallet is weighed down with cards, closing the 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.
Option 3: 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.
Cardholders who asked...
- Received a higher credit limit
- Got a late fee waived
- Got an annual fee waived or lowered
- Got a lower interest rate
Source: CreditCards.com study
Differences between cards with and without annual fees
Cards with annual fees frequently come with better sign-up bonuses and ongoing rewards, as we'll show you. But then, there is the plus of not having to pay a fee year after year.
Here, we compare 2 sets of cards from the same card issuers and even similar names. But heads up, the rewards vary even if the benefits are similar.
Comparing benefits between cards with and without annual fees...
|Blue Cash Everyday from American Express||$0||$150 intro bonus/$1,000 spend in first 3 mths; 3% back at U.S. supermarkets (up to $6,000); 2% back at U.S. gas stations, select U.S. department stores. Terms Apply||15-month 0% intro APR on purchases, balance transfers, then 14.49%-25.49% (Variable)|
|Blue Cash Preferred from American Express||$95||$250 intro bonus/$1,000 spend in first 3 mths; 6% back at U.S. supermarkets (up to $6,000, 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, balance transfers, then 14.49%-25.49% (Variable)|
|Capital One VentureOne Rewards||$0||20,000-mile sign-up/$1,000 spend in 3 mths; 1.25X miles per dollar on every purchase||No foreign transaction fee|
|Capital One Venture Rewards||$95, waived first year||50,000-mile sign-up/$3,000 spend in 3 mths; 2X miles per dollar on every purchase||No foreign transaction fee|
As you can see, while the Venture cards have similar benefits, the Blue Cash products vary in the 0% APR offer, so it's worthwhile to read the fine print.
Which is better: annual fee or no annual fee?
While cards with annual fees often have superior benefits, money can be saved with a card that has no annual fee.
You can save money by avoiding an annual fee if you don't plan to spend too high of an amount. For example, with the Blue Cash Everyday, which has no annual fee, and the Blue Cash Preferred, which has a $95 annual fee, with a $3,200 spend at U.S. supermarkets, the Blue Cash cards come out within a penny of each other.
Blue Cash Everyday vs. Blue Cash Preferred...
|Card||Cash back||Total minus annual fee|
|Blue Cash Everyday||3% x $3,200=$96||$96|
|Blue Cash Preferred||6% x $3,200=$192||$97|
If you spend less, the Blue Cash Everyday is worth your while. If you spend more, then the Blue Cash Preferred is the best pick.
Take another example. The Capital One Venture Rewards has a significantly higher sign-up bonus than the Capital One VentureOne Rewards – 50,000 miles as opposed to 20,000. Also, the $95 annual fee for the Venture Rewards is waived the first year. But what about after the first year?
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|
So, you see that the VentureOne Rewards is worth your while if you plan to spend less than $12,750 a year after the first year.
How to choose between different no annual fee cards
From credit-builder cards to cash back products, there are myriad credit card options with no annual fee.
Here are some questions to keep in mind as you choose between these cards:
- Do you want rewards for everyday spending? Some cards will give higher rewards for everyday categories such as groceries and gas.
- Is there a sister card? If so, there might be one with a waived annual fee the first year, such as the Capital One Venture Rewards, while the Capital One VentureOne Rewards has no annual fee. If you plan to spend a fair amount each year, the card with the annual fee may actually be the better choice.
- What about partnering cards? With the Chase Ultimate Rewards cards, you can pair up select products, transfer points to cards that have boosted rewards, and use the points toward travel. For example, you can do this with the Freedom cards (no annual fee) and the Sapphire cards. More on that later.
- Do you want to set it and forget it? These cards are great for using the card without thinking about it – 1.5% cash back is a common rewards rate among these cards.
- Do you want to chase rich rewards? The Chase Freedom and the Discover it Cash Back, both with no annual fee, offer quarterly rotating categories of 5% back and 1% on all other purchases. Be mindful of the requirements though, because with these cards, you have to activate to sign up for the new bonuses each quarter. Also take note that both cards' 5% cash back only apply up to $1,500 in purchases in the quarter's categories before moving to 1%.
- What about a sign-up bonus? Many no annual fee cards come with sign-up bonuses, even up to $150 if you spend $500 in the first 3 months, as with the Wells Fargo Cash Wise. Or you instead might get your cash back matched at the end of your first year, as with the Discover it cards.
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.
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.
But if you play it right, you can use the cash back, no annual fee card for, say, all spending, and use the travel card to get a sizeable sign-up bonus with your favorite hotel or airline brand, as well as outstanding ongoing rewards for that brand.
For example, the Wells Fargo Cash Wise will earn you 1.5% back on all purchases, while the Chase Sapphire Preferred gives you 2X points on travel and dining. Simply use the CSP for those purchases and the Cash Wise for everything else. In addition to the ongoing rewards, the Sapphire Preferred card will earn you 60,000 points after a $4,000 spend within 3 months.
What to know when pairing Chase cards
When pairing no annual fee cards and annual fee cards, there is no comparison when looking at the Chase cards.
Through the Chase Ultimate Rewards program, you can get the added travel bonus points of the Sapphire cards. In fact, the Sapphire Reserve, delivers a 50% bonus on points when you redeem for travel through Ultimate Rewards.
Then there are the Freedom cards. While you can't earn an Ultimate Rewards bonus with the no annual fee Freedom cards, you can match them up with Sapphire cards and transfer the Freedom rewards, use them toward travel, and get the boost that way.
Pairing Chase Ultimate Rewards cards...
|Card||Rewards||Ultimate Rewards boost||Annual fee|
|Freedom||$150 sign-up bonus / $500 spend in 3 mths; 5% back on quarterly categories, up to $1,500 a quarter||N/A||$0|
|Sapphire Preferred||60,000-point sign-up bonus / $4,000 spend in first 3 mths; 2X points on worldwide travel, restaurants||25%||$95|
|Sapphire Reserve||50,000-point sign-up bonus / $4,000 spend in 3 mths; 3X points on worldwide travel*, restaurants; $300 annual travel credit||50%||$450|
*earn 3X points on travel immediately after earning your $300 travel credit
Want some more information?
Check out our reviews for no annual fee cards to explore more credit card offers that waive that cost every year.
Laura is an editor and writer at CreditCards.com. She has written extensively on all things credit cards and works to bring you the most up-to-date analysis and advice. Laura's work has been cited in such publications as the New York Times and Associated Press. You can reach her by e-mail at email@example.com and on Twitter @creditcards_lm.
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