Credit Cards with No Annual Fees

This Section Features Credit Cards with No Annual Fees

So, why do credit cards have annual fees in the first place? I mean, it's not like they're losing money on their interest rates or anything. The truth is, credit cards were born with annual fees.

The first credit cards out there were charge cards that didn't charge interest because you paid your balance in full every month.

Soon, card holders began to carry balances, and competition heated up between the top credit card issuers for this new and lucrative business.

In fact, in the early stages of balance over time credit cards; annual fees were actually removed in by the card issuers in order to entice people to move their company.

No Annual Fees and Credit Type

First rule of thumb, if you have good or excellent credit, and you are not using the card for a specific rewards program, you should almost never have to use credit cards with annual fees. Also, if you have not established credit, there are still some cards available with no annual fees like the Capital One® Cash Rewards for Newcomers card or the Journey Student Rewards from Capital One®.

However, if you do have some credit issues, it's pretty certain that you will have to pay an annual fee. Some cards will infer that you "may not" have an annual fee by showing the cost of the annual fee like this; "$0 - $40", but chances are you will. You shouldn't have to pay more than $40 per year, and if you pay that card on time, chances are you can trade up to get a credit card with no annual fees.

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Reward Programs and Annual Fees

If you are serious about using a reward program, e.g. you're a serious traveler, you should probably expand your search to travel reward cards that do have annual fees. On the other hand, if reward programs are nice, but not the entirety of why you want a credit card, you will find more than enough credit cards in this section to suit your needs.

"Up Front Bonus" Cards and Annual Fees

Nowadays, a lot of credit card issuers are offering up-front bonuses like airline tickets, coupons and straight up cash if you simply choose their card over the competitors card. You need to be careful here, some of these card will have annual fees, however a lot of them will not. Again, if you are not a serious reward user, it is probably unnecessary for you to have to pay an annual fee. A good section to visit if you're interested in credit cards with up-front bonuses is the "Limited Time Section".

Regular Cards and Annual Fees

If you could care-less about rewards programs, and if you have good credit, you will find your best deals in the "Regular Cards" section below. These cards offer few perks, if any, but they almost always have the best rates and no annual fees.

When Paying a Credit Card Annual Fee Makes Sense

The credit card companies have loaded up their menus with credit cards to satisfy just about any appetite, so the choices are many which make the selection of just the right card difficult. There is one differentiator that easily separates all credit cards into two simple categories – those that charge an annual fee and those that don’t.

  Available data has shown that about 20% of the credit cards being offered do charge an annual fee. For most people, that can narrow down the choices somewhat, but is there any instance when it might make sense to get a card that charges an annual fee? That really depends on exactly what you want to get out of your credit card.

With 80% of the cards being offered not charging an annual fee, why would anyone want to consider a card that does?

Will You Qualify?

The first consideration is whether a person can qualify for a credit card with no annual fee. Most of the premium credit cards, those offered to people with excellent credit, don’t charge an annual fee.  Citi and Chase don’t charge annual fees on their top tier cards, but they do charge an annual fee on their lower tier cards, those that are offered to people with less than excellent credit. 

While there are card companies that offer no-fee cards to people with less than excellent credit, it is important to consider all of the terms being offered including the APR and other fees that affect the overall cost of using the card.  Credit cards with exorbitant annual fees ($100+) should always be avoided.

Are You a Traveler?

Another consideration is whether one of your primary objectives for obtaining the card is to earn travel rewards. Many credit cards issued under a travels reward program, especially those with specific airline affiliates, do charge an annual fee.

If you are a frequent traveler who wants to build miles toward free flights on a specific airline, such as United or Southwest, you are likely to pay an annual fee for the card. So, this additional cost needs to be weighed against the benefits you will receive through free flights.

Then there are the premium membership cards such as those offered by American Express, with fees ranging from $125 for their Gold Card up to $2500 for their “black card”.  Most people who use American Express cards do so for the implied prestige that goes along with it. But, American Express does live up to that prestige by offering benefits and services not typical of most credit cards. And, as a “member”, you do participate in their very robust Membership Rewards program.

For those who would rather not pay an annual fee of any kind, there are plenty of offerings depending on your credit standing. Many come with cash back and travel rewards programs. It’s always important to study all of the terms of the card to understand all of the ways the card company can earn money from your account. Sometimes the small print reveals that “no annual fee” simply means that it is waived in the first year.