4 Great Rewards Credit Cards With No Annual Fee
These cash back, miles and points cards never hit you with a fee for just keeping them in your wallet.
You probably don’t need to pay an annual fee on your credit card.
Now, there are certainly exceptions to that rule. For example, if you pay an $89 annual fee on a credit card and you get $150 worth of value from it – in the form of cash back, free baggage checking, airport lounge access, companion tickets and other such perks – then by all means, keep the card with the annual fee. The math clearly works for you.
The truth, however, is the math doesn’t work for most people. After the first year when all the associated sign-up bonuses are in the rearview mirror, most people don’t get enough value from the perks associated with their credit card to justify paying an annual fee. Not to worry, though. There is a variety of credit cards out there for the annual fee-averse among us.
We took a look at some of the top cards on the market that don’t feature annual fees. While there are plenty of compelling cards that waive their annual fee for the first year and then charge one in subsequent years, we aren’t featuring those in this story. Here are cards that never have an annual fee – in the first year and beyond:
Citi Double Cash: If you like cash back cards – and most Americans do – you need to decide which type of cash back card you prefer: the rotating category type or the set-it-and-forget-it type. For those who prefer the latter, the Citi Double Cash card is tough to beat.
The marketing hook is it gives you 1 percent cash back when you buy and another 1 percent back when you pay. In reality, though, it is basically a straightforward 2 percent cash back card. (That’s assuming you pay your bills. If you don’t do that, you have more to worry about than credit card rewards.) There are no category restrictions or earning caps. There’s no annual fee. And the APR is as low as 13.24 percent – though those with less-sterling credit could see an APR as high as 23.24 percent.
Add in 0 interest offers for 15 months on both purchases and balance transfers, and this card is worth considering.
Discover it: For fans who prefer their cash back cards to be of the rotating-category type, Discover it has clear appeal: double cash back.
Rather than the traditional sign-up bonus, Discover offers to double all the cash back that new cardholders have earned at the end of their first year. Earn $50, they’ll give you $50 more. Earn $100, they’ll give you $100 more.
The card offers 5 percent cash back on categories that rotate each quarter (currently gas stations and ground transportation companies, such as Uber and Lyft, are featured) and 1 percent back on everything else. There’s no annual fee, overlimit fee or foreign transaction fee. Plus, they won’t charge you a late fee the first time you’re late with a payment, and you’ll get a free FICO credit score on your monthly statements and online.
The card’s APR is as low as 11.24 percent, well below the national average of roughly 15 percent for new credit card offers. But as is often the case, those with weaker credit will pay more – up to 23.24 percent.
Miles and Points Cards
Capital One VentureOne Rewards Credit Card: The VentureOne Rewards card gives you a sign-up bonus of 20,000 miles once you spend $1,000 on purchases in the first three months. The value of those miles: $200 in travel, and unlike airline-specific cards, those miles can be used to stay at any hotel or fly on any airline anytime. That’s a big plus, especially if you’re not loyal to a particular airline or hotel chain.
You earn 1.25 miles per dollar every time you use the card – and after a 12-month introductory period of 0 percent interest on purchases, the APR ranges from 12.24 to 22.24 percent.
Do know, however, that by forgoing the annual fee, you’ll be settling for a smaller sign-up bonus. The Capital One Venture Rewards card comes with a 40,000 mile bonus once you spend $3,000 on purchases in the first three months. That equals $400 in free travel – twice the offer of the no annual fee card – so take that into account before you apply.
Discover it Miles: The miles version of the Discover it card offers new cardholders double miles at the end of their first year. Each dollar spent on the card is worth 1.5 miles, so the double bonus means that cardholders will effectively earn 3 percent cash back on every purchase for the first year. That’s hard to beat.
The card is similar to its cash back counterpart in that it has the same APR range (11.24 percent to 23.24 percent), the same 0 percent introductory period on purchases, no annual fee, no foreign transaction fee and no late fee on your first missed payment. But the miles card is a set-it-and-forget-it card, unlike the cash back card, so there are no rotating categories to chase.
For the most part, cash back fans who want to avoid annual fees at all costs won’t be missing out on much. Many of the best and most popular cash back offerings forgo an annual fee anyway.
It’s a bit of a different story with miles or points rewards cards. Cards that don’t have an annual fee might have lesser rewards and perks than those that do feature an annual fee – the aforementioned Capital One cards are a perfect example.
The good news, however, is that annual fees don’t have to be an all or nothing proposition. Many popular rewards cards on the market come with an annual fee but waive it for the first year. That means even the most annual fee-averse among us can still get some of the industry’s biggest sign-up bonuses. Just make sure you cancel that card before that first annual-fee-free year ends.