Credit cards with no annual fee can offer you the financial flexibility of a credit card without having to worry about any additional cost incurred just to keep the account open.
"Some credit cards have no annual fee for the first year, but will charge an annual fee for subsequent years. Make sure you are clear about what it is you are signing up for so you don't get a surprising charge in a year's time."
David Boyd
CEO at Credit Card Compare
Benefits of no annual fee credit cards
These are some of the most notable features of credit cards with no annual fees.
- Cost savings: By not having to pay an annual fee, you can save money on your overall credit card expenses.
- Financial flexibility: Without having to pay an annual fee, you have a little flexibility in managing your finances. There is no loss for you, even if you do not frequently use these cards.
- Introductory offers: Some no annual fee credit cards come with attractive introductory offers such as 0% interest rates or bonus rewards.
- Build credit history: Using a no annual fee credit card responsibly can help you build a positive credit history.
- Additional features: Despite not having an annual fee, there are a few no fee credit cards with rewards. That said, they are thin on the ground and tend to have a low earn rate per dollar spent.
How to choose a no annual fee credit card
When selecting a no annual fee credit card, consider the following factors before signing up.
- Interest rates: Look for a card with competitive interest rates to save on finance charges.
- Rewards programs: Some no annual fee cards offer rewards points or cashback, enhancing their value. The trade-off is that their earn rate will be lower than average.
- Additional fees: While the annual fee may be waived, check for other fees, such as late payment fees or foreign transaction fees.
- Perks and benefits: Most credit cards with no annual fee are fairly limited in terms of any additional benefits outside of a line of credit. It's rare for them to have features like travel insurance, purchase protection, and concierge services.
- Credit limit: Ensure the credit limit meets your spending needs without risking overspending. These cards tend to be relatively no-frills, so above average credit limits are unlikely.
"If you're wondering what the point of having a credit card is when you don't really need one, they can come in handy when you least expect it. I once left Australia without my wallet, which caused all kinds of issues when checking into various hotels over the next two weeks."
David Boyd
CEO at Credit Card Compare
How to manage a no annual fee credit card
Here are a few tips to get the most out of a no annual fee credit card.
- Check your statement regularly: Keep track of your spending and payments to avoid unnecessary fees.
- Always pay on time: Timely payments means you avoid interest charges and can improve your credit score.
- Maximise rewards: If your card offers rewards, be strategic with your spending to maximise your benefits.
- Review terms and conditions: Stay informed about any changes in terms, fees, or benefits associated with your card, particularly interest rates.
Methodology for our no annual fee credit card comparison
We considered the following attributes and associated metadata when ranking our comparison of credit cards with no annual fee.
- Annual fee initial year: If the card has no annual fee for the first year only.
- Annual fee ongoing: If the card has no annual fee after the first year.
- Apple Pay enabled: Whether the card works with Apple Pay. Being able to is considered beneficial.
- Balance transfer offer: Whether there is an introductory balance transfer offer available, its interest rate, period, and any fee. A lower rate for longer is considered better.
- Card type: Whether the card runs on the American Express, Mastercard, Visa, or other network. Depending on which, acceptance may be affected.
- Foreign exchange fee: If the card charges a fee to convert foreign currency transactions. The lower the better.
- Interest-free period: If the card has interest-free days and how many. More is better.
- Introductory purchase rate: Whether there is an introductory purchase rate, its interest rate, and period. A lower rate for longer is considered better.
- Late payment fee: Whether there is a fee and how much it is if a payment is late. Lower is better.
- Maximum credit limit: The highest possible credit limit on the card, if published.
- Minimum credit limit: The lowest possible credit limit on the card, if published.
- Minimum income required: What the card's minimum eligibility criteria requires for income. A lower amount makes the card accessible to more people.
- Purchase rate ongoing: What the interest rate is on purchases that are carried over and not paid in full. Lower is better.
- Rewards program: If the card earns any rewards in the form of points, cashback, vouchers, etc. Earning rewards is considered beneficial for a no annual fee card.
- Samsung Pay enabled: Whether the card works with Samsung Pay. Being able to is considered beneficial.
- Sign-up bonus: Whether the card has a bonus offer and the minimum spending criteria required. A sign-up bonus is considered beneficial for a no annual fee card.
Our rankings may not reflect what matters most to you. Be sure to compare key rates, fees, and features against your own financial priorities before deciding.
