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How does a no fee credit card work?
As the name suggests, a no fee credit card is a card that doesn't have an annual fee. A lot of cards charge a fee just for the privilege of using them, but no fee credit cards give you basic credit card benefits and don't charge a dime. Some even come with rewards, cash back, and other perks.
Who should get a no fee credit card?
Students, the budget-minded, and anyone who wants a basic, backup credit card. Most students don't have a lot of extra money lying around, so paying annual credit card fees doesn't make sense. And if you're trying to stick to a budget, an annual credit card fee won't help your cause.
At the higher end, some people use fancy, high-reward American Express or Diners Club credit cards, but also carry an extra card in case their main card doesn't work. That's where the no fee credit card comes in. No fee cards cost nothing to own, so they're the perfect back up.
What features and benefits do no fee credit cards have?
Cards without annual fees often come with good rewards programs. Many offer cash back, travel rewards, and other rewards points.
For example, here are some of the perks you can get with an American Express AIR MILES Credit Card: you can earn 1 reward mile for every $15 in card purchases at AIR MILES Sponsors and 1 reward mile for every $20 in purchases made everywhere else. On top of that rewards system, you'll also receive a bonus of 500 reward miles the first time you use your card. All for no annual fee.
If you prefer cash rewards, the SimplyCash Card from American Express might be perfect for you. With the SimplyCash Card, you can earn up to 5% cash back on all your gas, grocery, and restaurant purchases for the first 6 months and up to 1.25% cash back on all eligible purchases afterwards.
Many no fee credit cards also offer concierge services, rental car discounts, fraud protection, 24-hour customer service and more. If you pay your balance on time and use your card responsibly, you'll get all these benefits at no extra charge.
Are there any disadvantages to using a no fee credit card?
No fee credit cards often don't provide the same level of rewards benefits that fee-charging cards offer.
They usually come with fewer travel benefits as well. You probably won't get trip cancellation coverage, baggage loss reimbursement, or travel emergency medical coverage with a typical no fee card.
Check the table below to see how some of our favourite no fee credit cards stack up against a comparable fee card.
What should I watch out for when it comes to my no fee credit card?
Some credit cards only waive their annual fee for the first year, but still get categorized as no fee cards. If you're looking for a card that never requires an annual fee, make sure the card's no fee status is permanent and not just an introductory offer.
And, as with all credit cards, check the fine print and carefully review the interest rates and surcharges on the card.
Compare no fee credit cards today
Don’t believe in paying annual fees just for the privilege of using a credit card? You’re not alone. There are plenty of great no fee cards out there, and we can help you find the best one — just like that.
LowestRates.ca may receive compensation when you click on links to those products or services; however, our content and calculations are objective and free from bias. The opinions expressed are purely those of LowestRates.ca; thus, partners are not responsible for any editorials or reviews that may appear. For current term and conditions on any advertiser or partner’s product, please visit their website.
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