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Advantages and disadvantages of having a no-fee credit card.
No two people are the same financially. Everyone has their personal budgetary restraints and limits. That is why different credit cards will appeal to and work better for some people more than others. When considering the type of credit card you need, alongside your own budgetary framework, be mindful of what no-fee cards do and do not offer.
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.
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.
Earn up to 1.25% cash back on all eligible purchases afterwards.
The Tangerine Money-Back Credit Card earns you:
2% money-back rewards on your everyday purchases in two 2% money-back categories of your choice.
0.50% money-back rewards on all your other everyday purchases.
Many no-fee credit cards also offer things like:
Rental car discount
24-hour customer service
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?
If you simply want or need credit and are not concerned with the perks, a no-fee credit card does the job.
However, 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.
1 reward mile for every $15 spent on gas/grocery/drug store purchases, and for every $20 spent elsewhere.
500 AIR MILES®* Reward Miles.
Your no-fee card questions, answered.
Looking for more credit card info? Check out our Help Centre.
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.
How can I find the best no-fee credit card in Canada?
Finding the best no-fee credit card in Canada is easy when you comparison shop on LowestRates.ca. We will break down the best no-fee cards in Canada and tell you which ones have rewards, how you earn those rewards, the interest rates associated with the cards and so much more.
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.
About the Author
Joel Kranc is an award-winning writer, author and journalist. Most of his experience lies within the institutional investment and financial services space. He also covers a variety of business topics for publications in North America and the UK.
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