No Annual Fee Credit Cards

There are hundreds of no annual fee credit cards available, which can obviously make it difficult to choose the right offer. But finding the best no annual fee credit card for your needs doesn’t have to be complicated. You just need to know your credit score and how you plan to use your new card.

For example, the best no fee credit card for a student who loves to travel and always pays his or her bills in full would be very different from the top card for someone with excellent credit who’s in the market for a balance transfer.

With that in mind, our editors compared more than 900 offers with no annual, monthly or one-time fees in search of the best offers for the most common consumer needs. You can find their picks for the year’s best no annual fee credit cards below.

2018’s Best No Annual Fee Credit Cards:

The lower your credit score is, the more important it is for you to get a no annual fee credit card. After all, low-cost credit improvement should be your top priority. Things aren’t so clear cut for people with good or excellent credit, however. Many of the best rewards credit cards charge annual fees, at least beginning the second year your account is open, but their generous terms can more than make up for the cost if you use your card regularly.

With that being said, if you’re looking for the best no annual fee credit card overall, you need not look further than Citi Double Cash. Not only does it not charge an annual fee, but it also rewards you at nearly twice the market rate when you pay your bill in full and can help you reduce the cost of existing debt. You can find the particulars below.

2018’s Best No Annual Fee Credit Card: Citi Double Cash

• Best No Annual Fee Rewards Cards: Citi® Double Cash Card – 18 month BT offer, PenFed Premium Travel Rewards American Express® Credit Card & Chase Freedom Unlimited®.
  
• Best 0% APR Credit Cards with No Annual Fee: Citi Simplicity® Card - No Late Fees Ever, Chase Slate® & HSBC Platinum Mastercard® credit card.
  
• Best Low Interest Credit Cards with No Annual Fee: First Command Bank Platinum Visa® Card & Dollar Bank Low Rate Credit Card.
  
• Best No Annual Fee Credit Cards for Bad Credit: Capital One® Secured Mastercard®, Discover it® Secured Card - No Annual Fee & Harley-Davidson® Secured Credit Card.

Many of the market’s best overall credit cards charge annual fees. And while that’s counterintuitive in the sense that no one would opt for a card with a fee over a no fee card if all else were equal, you have to remember that other factors are in play. In most cases, rewards are the explanation.
It doesn’t really make sense to pay a fee to use a 0% credit card, after all, since your goal in that situation is to reduce the cost of your debt. But paying a fee for one of the best rewards cards can help you get the most total value. It just depends on your spending habits and available options. You generally won’t qualify for rewards worth paying for until you have at least good credit.
So the moral of the story is that you can’t assume a no fee credit card is automatically better than a card with a fee. You have to compare the total package offered by each to see which is right for your particular needs.

When people talk about no fee credit cards, they usually mean those without annual and monthly membership fees. But some folks want more: a truly fee-free credit card, with no past-due fees, over-limit fees, balance-transfer fees or foreign-exchange fees, either. Cards lacking all such fees do indeed exist. The PenFed Promise Credit Card is one good example. However, there are two important things you need to understand about such offers:
First, if you need a card without over-limit and past-due fees, you shouldn’t be looking for a credit card at all. The damage you’ll do to your credit by missing payments or maxing out your spending limit will surely outweigh whatever you save by avoiding fees for those offenses. This is especially true in the post-CARD Act era, as penalty fees can’t exceed the actions that trigger them. For example, if you spend $5 more than your allotted credit limit, the maximum fee would be $5.
Secondly, there’s no perfect credit card. Every offer has its fair share of pros and cons, and credit cards that lack fees entirely usually compensate by offering worse rewards or interest rates. That’s why credit cards without balance transfer fees have relatively high APRs, why rewards cards without fees tend to offer reduced earning rates, and so on.
The moral of the story is that you should compare credit card offers solely based on the features that will affect you most, given your spending and payment habits. After all, if you plan on using your card for rewards, why would you care if it has a balance transfer fee?

Picking a no annual fee credit card can be tough, seeing as they all have one major thing in common. But finding the best no annual fee credit card for your needs is simply a matter of deciding how you’re going to use it.

• If you want to lock your card in a drawer to build credit without being tempted to overspend, it doesn’t really matter which particular no-fee card you get.
• If you plan to make everyday purchases and pay your monthly bill in full, focus on finding rewards that suit your lifestyle. Most people should opt for cash back, but frequent travelers can score big-time savings from the best travel rewards cards.
• If you want to finance a big purchase or transfer a balance, look for the longest 0% intro period and, if applicable, watch out for transfer fees.

Finally, if you want to skip the heavy lifting without sacrificing any savings, sign up for a free WalletHub account. We’ll give you a personalized credit card recommendation based on your latest credit score and report.

Credit card companies make money in a variety of different ways. This includes charging annual fees on many offers, sometimes in addition to monthly fees and certain one-time fees. But credit card companies also require merchants to pay so-called interchange fees whenever credit cards are swiped at their stores. Furthermore, card issuers assess interest on balances carried from month to month. And they charge for late payments and over-limit spending (if you opt-in for the ability to exceed your limit).
So as long as a customer actually uses his or her card, the issuer will have plenty of opportunities to make money, even if charging an annual fee isn’t one of them.
With that being said, a credit card company is bound to lose money on a no annual fee credit card that gets activated but goes unused. Because from mailing statements to operating a customer service department, there are many fixed costs associated with running a credit card program. That’s why credit card companies would prefer to always charge annual fees if they could get away with it. But competition and consumer demand make that impossible.