Our Picks: Best No Annual Fee Credit Cards
Chase Freedom Unlimited®
Why this is one of the best no-annual-fee cards: Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) – worth up to $300 cash back. That’s 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on dining and drugstores, and 3% on all other purchases. The Chase Freedom Unlimited® card offers 5% cash back on travel purchased through Chase Ultimate Rewards, 3% cash back on dining (including takeout and delivery services) and drugstore purchases and 1.5% cash back on all other purchases. The card includes a 0% intro APR on purchases for 15 months from account opening on purchases and balance transfers (then an APR of 18.74% – 27.49% Variable applies). See our full review.
Discover it® Cash Back
Why this is one of the best no-annual-fee cards: The Discover it Cash Back offers 5% cash back each quarter in rotating categories, such as Amazon.com, grocery stores, restaurants, and gas stations, up to the quarterly maximum when you activate. All other purchases earn unlimited 1% cash back. Cardholders pay no annual fee, and Discover will match your cash back earnings at the end of the first year. See our full review.
Chase Freedom Flex℠
Why this is one of the best no-annual-fee cards: Chase Freedom Flex earns varied rewards and charges no annual fee. Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening! The Chase Freedom Flex℠ includes 0% intro APR on purchases for 15 months from account opening on purchases and balance transfers (then an APR of 18.74% to 27.49% variable applies). See our full review.
Blue Cash Everyday® Card from American Express
Why this is one of the best no-annual-fee cards: The Blue Cash Everyday® Card from American Express offers a solid 3% cash back at U.S. supermarkets (on up to $6,000 annually, then 1%), 3% Cash Back at U.S. gas stations, on up to $6,000 per year, then 1%, and 3% Cash Back on U.S. online retail purchases, on up to $6,000 per year, then 1%. Also attractive is the intorductory APR of 0% on purchases for 15 months (then 18.24% to 29.24% variable) and the introductory bonus. New cardholders can earn up to $250 – Here’s How: Earn up to $150 back when you shop with PayPal. Earn 20% back as a statement credit on purchases when you use your new Card to check out with PayPal at merchants in the first 6 months of Card Membership, up to $150 back. Plus, earn $100 back as a statement credit after you spend $2,000 in purchases on your new Card in the first 6 months of Card Membership. See our full review.
Capital One VentureOne Rewards Credit Card
Why this is one of the best cards for no annual fee: The Capital One VentureOne Rewards Credit Card charges a $0 annual fee and offers 0% intro on purchases for 15 months and then a 19.24% to 29.24% (variable) APR after that. It also offers a 0% intro on balance transfers and then a 3% fee on the amounts transferred after the first 15 months. Cardholders earn an unlimited 1.25 miles per dollar on every purchase, plus 5 miles per dollar on hotels and rental cars booked through Capital One Travel. Earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening. See our full review.
Discover it® chrome
Why this is one of the best no-annual-fee cards: Discover it chrome gives cardholders a 15-month 0% introductory annual percentage rate on purchases and balance transfers (then a 15.74% – 26.74% Variable APR *Rates as of December 15, 2022 applies). The card charges no annual fee. Gas and restaurant purchases earn 2% cash back on up to $1,000 in combined spending each quarter, and all other purchases get 1% back. See our full review.
Citi Custom Cash℠ Card
Why this is one of the best credit cards with no annual fee: Cardholders earn 5% cash back in the category where they spend the most each billing cycle, on up to $500 in spending. This category automatically adjusts each billing cycle based on the cardholder’s spending habits, which allows for maximizing cash back rewards without signing up for rotating bonus categories or paying an annual fee. See our full review.
Discover it® Balance Transfer
Why this is one of the best cards with no annual fee: The Discover it Balance Transfer card comes with an 18-month 0% introductory APR on eligible balance transfers and a six-month 0% introductory APR on purchases, so cardholders can pay off a balance over time without incurring interest charges. After the introductory period, the card charges a 15.74% to 26.74% variable APR rates as of december 15, 2022. At the same time, cardholders can get 5% cash back in a rotating category up to a maximum amount each quarter after activating, plus 1% cash back on other spending. See our full review.
Bank of America® Customized Cash Rewards credit card
Why this is one of the best credit cards with no annual fee: You’ll still get significant rewards with this card, even while paying no annual fee. The card lets you pick one category to earn 3% cash back – including gas or online shopping. Grocery store and wholesale club purchases earn you 2% back. You’ll also earn a $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening. See our full review.
Bank of America® Unlimited Cash Rewards credit card
When Should You Get a No-Annual-Fee Card?
A credit card with no annual fee could make the most sense for you, depending on your spending habits and needs. This type of credit card can be a good pick when:
- You can’t afford the extra cost. Although you may not pay an annual fee, be aware that no-annual-fee credit cards may charge other fees, such as late fees, balance transfer fees and foreign transaction fees.
- You’re not a big spender. Generally, a card with an annual fee provides more perks than a card without one, and the higher the fee, the better the benefits. However, you will need to be able to earn enough rewards to offset the annual fee, regardless of whether you use all the benefits.
- You need a starter or credit-builder card. Whether you want to build or rebuild credit, you can find many no-annual-fee cards to help you achieve your aims. This type of credit card does not require a strategy for earning rewards to offset the annual fee, which means you could keep the card open at no cost, even after you upgrade.
- You would like a card with a 0% introductory annual percentage rate. You don’t need to pay extra for 0% APR credit cards, even ones with long introductory offers.
- You want to diversify your wallet. If you are an experienced credit user with only top-tier cards in your wallet, you might like to add a no-annual-fee card.
What Are the Downsides of No-Annual-Fee Credit Cards?
While paying no annual fee certainly has its advantages, be sure to consider the downsides:
- Don’t expect top-tier perks. While not always the case, the most lavish benefits usually accompany credit cards that charge a higher annual fee. These perks may include free airline flights, statement credits, complimentary airport lounge visits and concierge service, among others.
- Plan to pay a higher interest rate. The money you save on the annual fee might be lost if you carry a balance or use your card for cash advances, as you’ll likely pay a higher interest rate.
- Look out for higher fees. Be sure your no-annual-fee credit card doesn’t charge more for cash advances, balance transfers or foreign transactions if you anticipate needing any of these services.
How Do No-Annual-Fee Credit Cards Compare With Their Annual-Fee Counterparts?
You might be willing to fork over an annual fee for your credit card if the value of your rewards and benefits outweighs the fee. Generally, cards that charge annual fees come packed with perks, and you can come out ahead despite the cost.
No matter what type of credit card you want, be sure to compare options with and without annual fees. These examples can show you how an annual fee may – or may not – pay off.
What to Consider Before Switching to a Credit Card With No Annual Fee
For cardholders who no longer want to pay an annual fee, switching to a no-fee card can be as simple as contacting your credit card issuer. But before you do, here are a few things to keep in mind:
- Know what will happen to your points. If you want to stay with the same issuer and just downgrade to a card with no annual fee, your points might be unaffected. However, if you plan to close the account and open a card from a different issuer, you may forfeit any points you’ve earned. The easy solution is to use your points before making a move to another card. But keep in mind that closing an account can lower your credit score.
- Know when you’re eligible to switch. You probably will not be able to downgrade your card within the first year the account is open. Ask your issuer if you aren’t sure.
- Don’t be afraid to shop around. Closing a credit card account can lower your credit score, but you can still look for the best no-annual-fee card you can qualify for if you have very good credit – a FICO score of 740 to 799 – and can afford to take a small hit to your score.
- If you downgrade, stipulate to the issuer that you don’t want to apply again. Be clear about this point so that the customer service representative doesn’t perform a hard inquiry on your credit, which can damage your credit score.
Why Should You Consider Downgrading to a No-Annual-Fee Credit Card?
If a card with a big annual fee is collecting dust in your wallet and you can’t justify the cost, you may want to downgrade to a no-annual-fee card that better suits your spending habits. Switching from one type of credit card to another with the same issuer, whether you are downgrading or upgrading, is known as a product change.
Asking for a product change rather than canceling your account avoids hurting your credit utilization ratio – the percentage of your total available credit you use – and credit history length, which can affect your credit score.
You could be ready to downgrade to a card with no annual fee if:
- You aren’t using a card much. If you aren’t earning many rewards or making the most of perks, keeping a card with an annual fee doesn’t make sense.
- You are paying for two similar cards that both charge annual fees. You could downgrade the one you use the least.
- You need to reduce your spending. When you experience a life change that affects your finances, such as a job loss or an addition to your family, you may no longer be able to justify paying an annual fee for a credit card.
- You’ve found a card that works better for you. A product change ensures that you won’t lose your available credit or credit history, which could damage your credit score.
How to Choose the Right No-Annual-Fee Credit Card for You
Consider your credit card needs and how you will use the card:
- What is the interest rate? If you plan to carry a balance or use the card for cash advances, this might be the most important question when choosing a card.
- What will I pay in fees? If you’re considering a balance transfer or frequently travel outside of the country, look closely at the fees you’ll pay.
- What additional benefits will I get? Is rental car insurance important to you? Would you like 100% fraud protection? Be sure to look at the extra benefits each potential card offers.
U.S. News has been helping consumers make money decisions for decades. For our Best No-Annual-Fee Credit Cards list, we consider issuer satisfaction data, rewards earning rate, annual percentage rate, introductory APR length for purchases and sign-up bonus value. Issuer satisfaction data is based on an annual nationwide U.S. News consumer survey.
Our top picks for cards that don’t charge an annual fee offer a range of rewards and benefits. Some credit cards earn cash back, others collect miles, and still others feature introductory APRs on purchases and balance transfers. You can explore which card might be a good fit based on your spending habits and goals.