Keep costs low and earn points with a no-annual-fee rewards card.
Rewards cards are popular products as they come with many perks. Not only can you earn points that can be redeemed for flights, cash or merchandise, but you can get complimentary travel insurance and personalized concierge services.
Unfortunately, most rewards credit cards also have high annual fees that offset the value of these benefits. But there are a handful of rewards cards that have no annual fee. Here, you can find out more about no-annual-fee rewards cards, compare your options and learn the factor to consider when choosing a card.
Our pick for a no-annual-fee rewards card
Blue Cash Everyday® Card from American ExpressRead more
Compare no-annual-fee rewards credit cards
Types of no-annual-fee rewards credit cards
These are the types of rewards credit card with no annual fee:
- No-annual-fee rewards points cards. These cards usually offer points as part of a credit card rewards program. These programs offer rewards that usually include travel, merchandise, cash and point transfers to frequent flyer programs.
- No-annual-fee cashback credit cards. This type of cashback card offers a straightforward reward structure where you can usually redeem your earnings as a statement credit.
- No-annual-fee frequent flyer credit cards. Frequent flyer credit cards offer great rewards for regular globetrotters. These cards let you earn points or miles per dollar spent, but you can only redeem your earnings within the frequent flyer program of that specific airline.
- No-annual-fee hotel credit cards. This type of card is similar to the previous types, except you earn accelerated points on your hotel purchases. These can be redeemed for reward nights for the highest value, but you can often transfer points to airlines or redeem for car rentals, travel experience and more.
- No-annual-fee cruise line credit cards. Similar to other travel cards, this type of card is focused on those who want the highest redemption value of reward points for cruise lines.
- No-annual-fee retail credit cards. If you often shop with certain retail stores, you can apply for a store card and earn rewards on your purchases. Examples of store cards include Target REDcard™ Credit Card, Amazon Prime Rewards Visa Signature Card, Walmart Credit Card, Apple Card and more.
- No-annual-fee gas credit cards. If you’re frequently on the road, a no-annual-fee gas credit card could be a good option. This type of card lets you earn accelerated points on gas purchases. Examples of such cards include Sam's Club® Mastercard® or the Costco Anywhere Visa® Card by Citi.
- Promotional offer rewards cards. Some frequent flyer and rewards credit cards may come with a waived or reduced annual fee during the first year. You typically have to pay the full annual fee from the second year onward. This makes it important to look for details or disclaimers on any promotions so that you’re aware of any ongoing costs that apply after the first 12 months.
Benefits of no-annual-fee rewards cards
Here are some of the benefits you can enjoy with a no-annual-fee rewards credit card:
- Signup bonus.
Many rewards credit cards offer bonus points to new cardholders for signing up. However, you might have to spend a certain amount on eligible purchases to unlock and receive your bonus points. For example: “Earn 30,000 bonus points when you spend $3,000 within the first three months of account opening.”
- Earn points for every dollar you spend.
As with all rewards cards, you will earn a specific number of points per dollar spent on eligible transactions. You can redeem these points for merchandise, gift and shopping vouchers, lifestyle products and services.
- Access to 0% intro APR offers.
This feature is popular among cashback credit cards as part of an introductory promotion. While the promotional period lasts, you can save money on interest fees and carry your card balance for longer periods without accruing any interest. But when the promotional period ends, any remaining balance will accrue interest at the standard rate for that card.
- Chance to add additional cardholders.
Additional cardholders on your credit card account can help you earn reward points faster. Some cards may charge a fee for each additional cardholder, although many of them offer this feature for free.
- A range of complimentary extras.
Depending on the rewards card, you may also enjoy perks such as complimentary travel insurance, purchase protection, extended warranty on purchases, airport lounge access and concierge services. Note that no-annual-fee rewards cards may not offer as many complimentary extras as rewards cards that charge an annual fee.
What else should I consider?
There are a number of other features and details you will need to consider when comparing rewards credit cards with no annual fees:
- Purchase rate.
If you carry a balance on your credit card, a high purchase rate can result in exorbitant interest fees over time. With 0% purchase rate promotional offers, the standard purchase rate will kick in once your promotional period is over.
- Cash advances.
The cash advance interest rate is usually higher than the purchase interest rate, and you will also be charged a cash advance fee for each transaction. Also, cash advances are ineligible for reward points.
- Balance transfers.
Some rewards cards may offer 0% balance transfer promotions when you sign up. This means you can transfer an existing credit card debt over to your new card and enjoy an interest-free period on that balance.
- Eligible transactions.
Most purchases are considered eligible transactions for earning rewards on your card, with the common exceptions of cash advances, balance transfers, gambling transactions, government payments, bank fees and bill payments. Consult your card provider or product disclosure statement for your card’s specific definition and exclusions.
- Other fees.
Other fees, such as ATM fees, late payment charges and over-limit fees, may be applied to your account. Depending on the card, international transaction fees may also apply to overseas transactions and internet purchases made with foreign merchants.
- Point expiry.
Most reward programs have an expiry date for the points you accumulate. It’s easy to lose track of this if you are not a big spender and don’t regularly earn enough rewards points to make frequent redemptions.
- Point cap.
Some rewards credit cards limit the number of points you can earn each statement cycle or year. Make sure you consider this cap before choosing a card so that you can find one that offers the most convenient limits based on your spending habits.
If you’re keen to earn reward points on your everyday spending but don’t want to pay fees, it’s worth considering a credit card that offers rewards without an annual fee. As always, we recommend you research all available options and compare cards in relation to your personal needs and spending habits so you can choose the one that’s right for you.
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