Chip Lupo, Credit Card Writer
@CLoop
Yes, it is good to get a credit card with no annual fee because it can help you build credit at a low cost and save money with rewards or low-interest promotions. There’s no pressure to spend excessively to make up for a fee when there is none, and you can keep the account open indefinitely to build a long credit history. Many credit cards with no annual fee also offer secondary benefits such as rental car insurance and extended warranty protection.
Why It’s Good to Get a Credit Card with No Annual Fee
Saves you money compared to the average credit card offer
The average annual fee among new credit card offers is currently $21.65, and some credit cards charge up to several hundred dollars in annual fees. By choosing a credit card with no annual fee, you can keep more of your money in your pocket and avoid starting the year with a deficit.
You can build credit at little or no cost
With responsible use, a credit card with no annual fee can help you build a positive credit history without having to spend a dime more than you would otherwise. Plus, people who are trying to build or rebuild their credit score likely won’t qualify for the best rewards credit cards, so they won’t be able to get enough of a rewards boost to benefit from paying an annual fee anyway.
Plenty of no annual fee credit cards have good rewards
Some credit cards with no annual fees reward you with cash back, points, or miles for each purchase. No annual fee rewards cards such as the Wells Fargo Active Cash® Card and Chase Freedom Unlimited® can end up saving you hundreds of dollars every year.
The best 0% credit cards have $0 annual fees
The best credit cards with 0% introductory APRs on purchases, balance transfers, or both all have $0 annual fees. These cards allow you to finance a major purchase or transfer high-interest debt, then pay off the balance interest-free for a certain number of months.
It's important to note that some credit cards with no annual fees may have high interest rates or other fees. Be sure to use the card responsibly and pay your monthly bills on time and in full to avoid interest charges and late fees, which can quickly negate other savings.
When It's Better to Get a Credit Card with an Annual Fee
On the other hand, it might be better to get a credit card with an annual fee if you want an above-average initial bonus or luxury benefits such as airport lounge access and annual travel credits. These features are rarely available on no annual fee credit cards. In general, the best approach is to consider how much each card is likely to save you, after accounting for any annual fees, and then go with the best deal.
Popular No Annual Fee Credit Cards
-
Cash Back
-
Bonus Cash Rewards
-
Travel
-
0% Intro APR
People also ask
Is it better to get a card with no annual fee?
It is better to get a credit card with no annual fee because it can help you earn rewards and improve your credit without any extra cost. You can leave a credit card with no annual fee open indefinitely, making it easier to build a long credit history as well...
read full answer by Ryan P Page, Staff WriterWhat does no annual fee mean?
No annual fee means you will not be charged every year for using your credit card. This means you’ll save anywhere from tens to hundreds of dollars in annual fees, depending on the credit card.
What you should know about credit card annual fees:
- Annual fees are often tied to high-end rewards cards, travel rewards cards, business cards, in addition to cards for people with limited and bad credit. The annual fee helps the issuer recoup the...
Why should I choose a no annual fee credit card?
You should choose a no annual fee credit card because it can help you save money while building a long credit history, even if you don’t spend very much or use the card frequently. No annual fee cards allow you to minimize the cost of owning a credit card, and many offer rewards and 0% APR periods. Whether a credit card with an annual fee can save you more money ultimately depends on which offers you qualify for...
read full answer by Theresa Chalfant, WriterDid we answer your question?
Important Disclosures
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers. For full transparency, here is a list of our current advertisers.
Advertisers compensate WalletHub when you click on a link, or your application is approved, or your account is opened. Advertising impacts how and where offers appear on this site (including, for example, the order in which they appear and their prevalence). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.
Advertising enables WalletHub to provide you proprietary tools, services, and content at no charge. Advertising does not impact WalletHub's editorial content including our best picks, reviews, ratings and opinions. Those are completely independent and not provided, commissioned, or endorsed by any company, as our editors follow a strict editorial policy.