While paying an annual fee on your credit card can be worth it, in the long run, credit cards with no annual fees have a lot better value. Credit cards with no annual fee make it easy to stay on top of your credit score, regardless of your spending. Plus, if having a credit card is free, you can keep it up longer at no cost to you, which will improve your credit score.
Overall, getting a credit card is a great choice to start building your financial future and if you have a pretty low revolving spending utilization, a credit card without an annual fee is definitely the way to go!
Top Credit Cards With No Annual Fee
With the Chase Freedom credit card you can earn 5% cash back on up to $1,500 in spending in quarterly rotating bonus categories, and 1% cash back on all other purchases. The card offers a $150 (15,000-point) sign-up bonus after you spend $500 within first 3 months from account opening. Points are worth 1 cent each toward travel booked though the Ultimate Rewards travel portal or toward gift cards. Chase Freedom APR varies from 17.24%–25.99% , which is a little higher than others on the list. But, as long as you pay off all of your card balance in time, it shouldn’t affect you!
Now let’s see if this card will be the right choice for you!
Benefits of the Chase Freedom:
- Chase Freedom has rotating bonus categories including grocery stores, gas stations and restaurants, which makes it easy to get bonuses without changing your regular spending habits.
- Chase Freedom offers a 15-month 0% APR period for purchases or balance transfers, which is a great stepping point.
Drawbacks of the Chase Freedom:
- You will have to remember to log in and activate the bonus categories to get the 5% cash back.
- Another drawback is the 3% foreign transaction fee – not too great if you are planning to travel.
Overall, this is a great starter card! The Chase Freedom Credit Card provides extra value at no cost. If you don’t mind keeping track of updating bonus categories and logging in quarterly, you will be getting cashback pretty fast. If you intend on spending $500 during the first 3 months, you will get a pretty great sign-up bonus! It has a high APR after the 0% APR period ends, so avoid having long-term debt on this card.
Just like Chase Freedom, the Discover it Card has rotating categories each quarter. The categories are every-day purchases like gas stations, restaurants, Amazon.com and wholesale clubs that offer 5% cash back on the first $1,500 in a specific category and 1% unlimited cashback on all other purchases. Discover is also doubling all cashback you earn during the first year after account opening. That means that for a year you’ll get 10% cashback on quarterly bonus categories and an unlimited 2% cash back on all other spending! Plus, for 14 months there is 0% Intro APR on regular purchases or balance transfers, which then becomes from 11.74% to 23.74% APR.
Benefits of Discover It:
- Awesome Feature – Discover automatically matches a dollar-for-dollar of all the cash back you’ve earned at the end of your first year. You get your money back monthly, and then get an extra bonus at the end of the year!
- Your cashback never expires, and you can redeem your rewards in any amount, at any time
- With this card you will have no annual fee, no over-the-limit fee and no late fee on the first late payment.
- Unlike Chase, this card has no foreign transaction fees!
Drawbacks of Discover It:
- While Discover is accepted almost everywhere in the US, you might run into issues if you use it outside of US. Remember to keep a debit card with you when you travel.
- Can be time-consuming to keep up with a bonus calendar.
Many people enjoy the 5% cash back for different retail categories and the cash back match at the end of first year, which adds up fast. It’s a lot better deal than just a $150 bonus from Chase Freedom, especially if you have higher spending. You just have to remember to activate your cashback every quarter. And remember that this card has no over-the-limit fee, no foreign transaction fees and no late fee on the first late payment.
The Citi Double Cash Card offers cash back twice. You get 1% cashback on all purchases and an additional 1% back as you pay off the credit card. This card offers 0% Intro APR on balance transfers for 18 months; after that the variable APR will be 15.74% – 25.74% based on your credit score.
Benefits of Citi Double Cash Card:
- You earn cashback twice
- The introductory period lasts 18 months, which is longer than regular 12 months
- A pass on your first late fee
Drawbacks of Citi Double Cash Card:
- Not great for traveling abroad – 3% foreign transaction fee
Let’s mention that 2% cashback on all purchases is a pretty great deal! Some of the benefits of this card is that you don’t have to keep up with rotating categories, and you won’t pay any fees as long as you pay off your statement each month. If you want simple cash back on all your spending, this is the card for you.
This card earns 1.5% cashback on all purchases every day. Although it has 0% intro APR for 15 months from account opening, it has 17.24%–25.99% Variable APR after that.
Benefits of the Chase Freedom Unlimited:
- With this card you will earn unlimited 1.5% cash back on every purchase.
- This card has no minimum to redeem for cash back and your cash back rewards do not expire as long as your account is open
- 0% on Purchases and Balance Transfers for 15 months
- You can earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
Drawbacks of the Chase Freedom Unlimited:
- Foreign transaction fee is 3% of each purchase
The Chase Freedom Unlimited Credit Card does not have an annual fee and has no minimum to redeem your points. While the rewards are not as high as the other cards, this card is perfect for you if you don’t want to spend time dealing with complicated loyalty programs.
BankAmericard Travel Rewards credit card lets you earn unlimited 1.5 points for every $1 you spend on all purchases everywhere, every time, without expiration on points. This card offers 0% Intro APR for your first 12 billing cycles
Benefits of the BankAmericard Travel Rewards:
- Competitive rewards rate covers not just airfare and hotels, but also charges at amusement parks and campgrounds.
- You will get a 10% bonus on your points if you have an active Bank of America® checking or savings account.
- Get 20,000 online bonus points if you make at least $1,000 in purchases in the first 90 days, which transfers into a $200 credit toward travel purchases.
- No foreign transaction fees.
Drawbacks of the BankAmericard Travel Rewards:
- Variable APR 17.24% – 25.24%
If you like to save money on traveling, the BankAmericard Travel Rewards credit card is for you. It has a strong $200 credit sign-up bonus, no foreign transaction fees and competitive ongoing rewards which is perfect for those who love travel hacking and earning points. If you use this card, have a checking account with Bank of America and travel a lot, you are on the right path for collecting points and getting free vacations.
All of the cards above would be a great card for someone who doesn’t have a high-revolving fund utilization. Also, having a credit card will improve your credit score and help you save money by earning cashback. If you still don’t have a credit card to help you build your credit score, you are missing out on building a strong financial future for getting mortgage or a car loan in the future. Credit cards without an annual fee is a great start!
What credit card do you have and what benefits/disadvantages have you run into from having it?