Best Credit Cards with No Annual Fee in July 2024

What is an annual fee?

An annual fee on a credit card is a yearly expense charged to your account by a bank to continue using the card. Many of the best credit cards require you to pay an annual fee in exchange for high-value rewards, but some cards do not require a yearly payment at all.

What does it mean to have no annual fee?

If you have a credit card with no annual fee, you won’t be charged a yearly cost to keep using it. However, like any credit card, you will still be required to pay other associated fees like balance transfer fees, foreign transaction fees, and APR.

No annual fee credit cards: Pros and cons

Is it worth it to get a credit card with an annual fee?

Sometimes it may be worth paying an annual fee on a card. Cards with annual fees tend to have more valuable rewards than their no-fee counterparts, so if you’re in the market for a reward-heavy card, you might need to pay an annual fee.

It doesn’t cost you anything to not use a no-annual-fee card as there isn’t a yearly cost to offset. On a card with an annual fee, you need to ensure you utilize the rewards enough to counterbalance the cost, otherwise you are essentially netting a loss.

The goal with a card with an annual fee isn’t only to earn enough to offset the yearly cost, it’s utilizing the rewards beyond that point.

Blue Cash Preferred® Card from American Express vs. Blue Cash Everyday Card

Consider this example of the Blue Cash Preferred® Card from American Express and the Blue Cash Everyday Card from American Express. In this illustration, we will evaluate each card after the first year.

If you frequently spend a lot on groceries at supermarkets in the U.S., (excluding Target, Walmart, or warehouse stores), then the Blue Cash Preferred card could be of immense value to you. However, if you don’t spend quite as much on groceries per week, then the no-annual-fee Blue Cash Everyday card may be a better option. If you tend to shop at stores like Target, Walmart, or Costco, a flat-rate cash-back card like the Wells Fargo Active Cash card may be more up your alley.

▶︎  Read more: Blue Cash Everyday vs. Blue Cash Preferred

▶︎ See: Best credit cards for groceries

Capital One VentureOne Rewards Credit Card vs. Capital One Venture Rewards Credit Card

Another example would be the Capital One VentureOne Rewards Credit Card and the Capital One Venture Rewards Credit Card. This example will only consider the non-travel rewards rate to make it easier to illustrate.

1 Capital One mile = approximately 1.4 cents, based on our valuation.

In this example, the Venture Rewards card does not catch up with the VentureOne until you have spent almost $200 per week since the Venture had to recoup an annual fee, and the VentureOne did not.

Although these illustrations don’t consider other rewards, they can hopefully help aid your understanding of how to evaluate the benefit of a card with or without an annual fee.

▶︎ See: Best travel credit cards and Best no-annual-fee travel credit cards

Why do some credit cards have an annual fee?

Credit card issuers charge an annual fee to offset high-value perks or an enticing sign-up bonus. Lucrative rewards don’t often come for free, so credit issuers charge a yearly fee to recoup some of their expenses.

When shopping for a swipe card, it’s essential to see if they charge a yearly fee. Every card is different and annual fees can be hundreds to thousands of dollars.

Therefore, if you’re interested in a top-of-the-line rewards card with luxury perks, you may also have to pay a high annual fee. Credit cards with no fee generally offer lower rewards rates and few extras, but if you’re looking to stay within a budget while still racking up some decent rewards, they offer many great options.

No-annual fee cards: Should you get one?

Who should get a no-annual-fee card?

Credit cards without annual fees can benefit almost anyone but can be especially useful for:

• Infrequent users. Maybe you already have a few credit cards or don’t spend very much. It may not be easy to recoup the cost of an annual fee, so a no-annual-fee card takes out part of that guesswork.
• Simple spenders. Many people don’t feel like tracking their expenses to ensure they’ve spent enough to make their card’s fee worthwhile.
• Economical individuals. Annual fees can be expensive and even if you can offset the cost with rewards, sometimes you just don’t want to. And honestly, there’s no shame in that.

Who shouldn’t get a no-annual-fee card?

No-fee credit cards are perfect for those who don’t make many purchases or don’t want to deal with a yearly cost. In some cases, however, paying an annual fee may be worth it.

• High spenders. If you’re a high spender, you can potentially earn more on your purchases with a rewards credit card with an annual fee.
• Avid travelers. If you’re an avid traveler, many of the top travel credit cards have an annual fee but also have valuable perks.
• Reward maximizers. If you’re good at maximizing credit card rewards, you’ll likely be able to reap tremendous benefits from cards with an annual fee. For instance, The Platinum Card® from American Express offers extensive statement credits that can easily cover the $695 yearly fee (see rates and fees) for those who use it wisely.

How to choose a credit card with no annual fee

Consider the following when choosing a no-annual-fee credit card:

1. Spending habits. Consider your spending habits to decide if a no-annual-fee card is the best fit. If you spend heavily in specific categories, a card with higher reward rates and an annual fee might offer better value.
2. Rewards and benefits. Compare the reward programs and additional benefits of no-annual-fee cards. Look for cards that align with your spending patterns and offer rewards you will actually use.
3. Introductory offers. Take advantage of introductory offers, but pay attention to when these offers expire and what the terms are after the promo period ends.
4. Interest rates. Check the card’s interest rates and make sure you can manage payments to avoid high interest costs. If you plan on carrying a balance, consider a card with a lower APR.
5. Credit score requirements. Look at the credit score requirements for the cards you are considering. Some may require an excellent credit score for approval, while others may be more accessible to those with good or fair credit.

▶︎ See: How to check your credit score

How to maximize your no-annual-fee card

• Pay off your balance in full, every month. Any balance carried from month to month will accrue interest, meaning you’ll be paying more in the long run. Learn more about how credit card APR works.
• Keep track of spending categories. If your card has elevated spending categories like dining, entertainment, or grocery purchases, ensure you’re taking advantage of that extra rewards-earning opportunity.
• Consider pairing it with a higher-end rewards card. Cards like the Chase Sapphire Preferred® Card or the Blue Cash Preferred offer tremendous value for a low annual fee. Once you have a solid grasp on your finances, a rewards card could make a valuable addition.
• Don’t close old accounts, even if you upgrade. It costs nothing to keep a no-annual-fee card open and it can benefit your credit score by improving your credit utilization ratio.

How we selected our top cards

We picked our top credit cards based on their rewards rates, sign-up offers, foreign transaction fees, balance transfer fees, travel perks, and more. We wanted to focus on cards that still offer high rewards and bonuses without the additional cost of an annual fee.

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^{For rates and fees of the Blue Cash Everyday® Card from American Express, please visit this page.}

^{For rates and fees of The American Express Blue Business Cash™ Card, please visit this page.}

^{For rates and fees of the Hilton Honors American Express Card, please visit this page.}