No Annual Fee Credit Cards: Reviews and Benefits
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Many credit cards charge an annual fee to keep the cardholder's account open and let them reap the benefits and rewards that come with it. Rewards also depend on the cardholder's spending habits and ultimately whether they would benefit them, making the annual fee worth every penny. On the other hand, some no annual fee credit cards do not charge you to keep your account open. Their rewards may not be as substantial as those cards that do have an annual fee, but of course, no annual fee credit cards still have their benefits for the right people.
Who Is Best Suited For A No Annual Fee Credit Card?
The no annual fee credit cards may not be for everyone, especially those looking to earn and enjoy the hefty rewards that come with a cash back or rewards credit cards. They are, though, a great option for the following people:
1. New credit card users
Being a new credit card user, you may not be too familiar with developing strategies to earn the most benefits that your card offers. Plus, an annual fee may be difficult to account for and prepare for, especially if you are a young adult with a basic income.
2. Credit score builder/ rebuilders
A no annual fee credit card is a great option also for people looking to build their credit score or rebuild it after a financial downfall. As most rewards credit cards require a good to excellent credit score to be eligible for, some no annual fee cards accept a poor credit score or no credit history for score builders.
3. Debt managers
Those managing their debts can benefit from the no annual fee credit cards, which often offer a zero percent introductory APR on purchases, balance transfers, or both. Such cards can provide an interest-free window of opportunity for cardholders to transfer balances between cards or make big purchases. Balance transfers, with most cards, have to be performed in the first few months of account opening.
4. Cardholders looking to diversify
Experienced cardholders with travel rewards credits or business credit cards may find a no annual fee credit card useful and worth their time for extra benefits with everyday purchases and zero percent introductory APR.
Top No Annual Fee Credit Cards
After considering these factors, you are ready to start your research and choose a no-annual-fee credit card. Before you do, take note that you want to make the most out of it. It is recommended that you pay your balance on time or in full each month, so your credit card balances do not accumulate. Moreover, paying balances and bills on time will help you rebuild your credit score, thus making you eligible for a rewards credit card later to pair it with whenever you are ready.
Let us now present you with our top three recommendations for no annual fee credit cards, so you can compare at your own pace and make the right decision.
1. Chase Freedom Unlimited®
Chase Freedom Unlimited® offers a zero percent APR on purchases and balance transfers for the first 15 months, and then the APR will vary between 15.24% - 23.99%. The Chase Freedom Unlimited® will gift you with its Chase Credit Journey, where you get to keep tabs on your credit score with free access to your score, real-time alerts, and more!
Chase Freedom Unlimited® will also earn you 6.5% cash back on travel expenses purchased through Chase Ultimate Rewards®, allowing you to redeem cash back rewards, travel, gift cards, and more. You also earn 4.5% cash back on drugstore purchases, dining, and restaurants with taking out and delivery included, and finally 3% cashback on any other purchases on up to $20,000 spent in the first year.
After the first year of $20,000 spending, you will earn 5% cashback on travel, 3% cashback on drugstore and dining, and lastly, an unlimited 1.5% cashback on any other expenses. Redeeming cashback has no minimum requirements, and you can choose between statement credits or direct deposits into your savings account.
Terms and conditions apply.
2. Hilton Honors American Express Card
The Hilton Honors American Express Card offers numerous rewards for its cardholders. For example, you get a great welcome offer where you can earn 100,000 Bonus Points after you spend $2,000 in purchases on the Hilton Honors Card in the first 6 months of Card Membership. The offer ends on 4/5/2023.
The Hilton Honors American Express Card charges a variable APR ranging between 20.24% - 29.24% on purchases and balance transfers.
As for purchases made at eligible restaurants, supermarkets, and gas stations, you earn 5X Hilton Honors Bonus Points. All other eligible purchases will earn you 3X Hilton Honors Bonus Points for each dollar in the USA.
The Hilton Honors American Express Card will also charge you zero fees for foreign transactions, making it a great option for international travelers.
Terms and conditions apply.
3. Citi® Double Cash Card
The Citi® Double Cash Card provides you with an introductory zero percent APR of 18 months for purchases and balance transfers; after that, you are charged an APR ranging from 13.99% to 23.99%.
As its name suggests, the Citi® Double Cash Card will provide you with double cashback; it earns you 2% on every purchase. To explain further, you get 1% cashback when you buy, plus another 1% as you pay for your purchases. You could find such benefit only with the Citi® Double Cash Card, and there are no cap limits or limited categories for cashback purchases. To earn your cashback, the Citi® Double Cash Card insists you pay your minimum due each month, as it encourages responsible use.
This card's foreign transaction fees will charge you the standard 3%, so it may not be your best pick if you are a frequent international traveler. As for the balance transfer fee, you will be charged 3% for the first four months, and after that, the fee rises to 5%.
Terms and conditions apply.
4. Capital One Quicksilver Cash Rewards Card
The Capital One Quicksilver card allows you to earn 1.5% cashback credits on all your purchases. It also offers you a welcome offer to earn $200 in cashback after spending your first $500 within your first three months.
The Capital One Quicksilver extends its zero percent APR for 15 months, where you will not be charged interest for balance transfer and interest during that period, and after that, the APR ranges between 14.99% - 24.99%. The Capital One Quicksilver also charges no foreign transaction fee, which, with its no annual fees and 1.5% cashback, makes it a great pick to help you with savings.
Moreover, you are also gifted with 24/7 concierge services, extended warranty protection on your purchases, and travel upgrades.
Terms and conditions apply.
How Should You Choose Your Best No Annual Fee Card?
Choosing a credit card should not be a blind decision; if you have not researched, you may be surprised with hidden costs and benefits that do not suit your lifestyle.
The same goes for no annual fee credit cards; choosing the right one can earn you the benefits you seek. First, you should consider a few factors and compare some rates.
Factors to Consider
1. Your spending habits
Understanding your spending habits is vital to making the right credit card choice. Each kind of no annual fee credit card offers rewards in specific categories, like restaurants and dining, gas, or supermarkets. So when you know where most of your spending goes, you can make your choice accordingly and make good use of the rewards you get.
2. Benefits and rewards
The next logical thing to consider are the benefits and rewards your no annual fee credit card will provide you. As we mentioned earlier, different cards offer different kinds of rewards such as cash back rewards, airline miles or points, or dining or gas discounts. You should know which kinds of rewards you are looking for, so you can make the right decision.
3. No annual fee rewards worth
Credit cards with an annual fee often offer greater benefits and rewards. Most also give their cardholders a welcome offer to get a certain number of points after a certain purchase amount in the first few months. No annual fee cards often offer lesser rewards, but you still may find the benefits rewarding in the categories you spend on.
Rates to Compare
A no annual fee card does not mean you are free from any other lingering fees and rates that may apply to your purchases. You should always look out for and compare the APR on purchases, and balance transfers your card will charge, in addition to balance transfer fees, late payment fees, foreign transaction fees, and the minimum due payment amount.
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This article includes the author's opinions, reviews, and analyses alone that have not been reviewed, endorsed, or approved by any of these entities. Please note that the information regarding each card's offer is believed to be accurate as of the date it was written and as card offers change regularly; reasonable efforts are made to maintain accurate information.