What’s the Best No Annual Fee Card?

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Million Mile Secrets reader, Danny, commented:

What is the best card to earn points or cash back that have no annual fee?  I know you recommend the Chase Sapphire Preferred, but that particular card has an annual fee.   Any recommendations?

Some folks, like Danny, don’t like to pay the annual fee on credit cards.  Especially when they’re new to miles and points.  So what are the best no annual fee cards?

The Trick To Getting Your Annual Fee Waived And Why You Shouldn't Use It

You Don’t Have to Pay an Annual Fee to Earn Great Rewards!  But Sometimes the Fee Is Worth It!

Find out which no annual fee cards I like best and why I think the Chase Sapphire Preferred card is worth the annual fee.

What You Need to Know Before Signing-Up for Credit Cards

The fastest way to earn miles and points for Big Travel with Small Money is from credit card sign-up bonuses and spending.  But you should keep these tips in mind before you start applying for credit cards:

The Trick To Getting Your Annual Fee Waived And Why You Shouldn't Use It

Please Don’t Sign-Up for Credit Cards Before You Understand the Risks and Have a Plan!

Here are questions you need to ask before getting started:

  • What Are the Risks? –  The hobby isn’t for everyone, so make sure you know the risks.
  • How Many Cards Should You Sign-Up For? –  I recommend folks who are new to this sign-up for 1 or 2 cards, until they’re comfortable.  This will give you time to see how your credit is impacted and if you’re able to pay your bills on time.
  • What Are Your Travel Goals? – Where and how do you want to travel?  Then figure out which miles or points will get you there.  Otherwise, you may wind up with points that aren’t useful to you.

2 Great Cards With No Annual Fee

Everyone should have a no annual fee card because you never have to cancel.  And this helps you build a long-term relationship with the bank.  You can show over a long period of time you can handle credit responsibly.

Here are a 2 no annual fee cards Danny might consider:

Chase Freedom

Link:   Chase Freedom

Link:   My Full Review of the Chase Freedom Card

The Chase Freedom card is my top pick for no annual fee cards.  That’s because it helps you build a relationship with Chase which has some of the best travel rewards cards available.

By signing-up for the Chase Freedom card and spending $500 on purchases within the 1st 3 months, you’ll earn 15,000 Chase Ultimate Rewards points ($150 in cash back).

I also like that you can earn 5X Chase Ultimate Rewards points (or 5% cash back) on up to $1,500 in spending in rotating categories each quarter like gas stations, department stores, and Amazon when you register.

If you spend the full $1,500 each quarter, you’ll earn 30,000 Chase Ultimate Rewards points per year (7,500 points per quarter) on purchases you’d likely make anyway.  That’s worth:

How To Get Big Travel With Small Money In New York City This Summer

30,000 Chase Ultimate Rewards Points Transferred to United Airlines Is Enough for a Round-Trip Coach Ticket Anywhere in the Continental US & Canada.  That Could Save You ~$500!

But I wouldn’t use the Chase Freedom card outside of the US because you’ll pay 3% in foreign transaction fees.

Discover It

Link:   Discover It

The Discover It card is another excellent choice for a no-annual-fee card.

You’ll earn $50 cash back when you sign-up for the Discover It card and make a purchase within the 1st 3 months of opening your account.

But perhaps best of all, Discover will double all your cash back after your 1st 12 billing cycles.

With Discover it, you get 5% cash back (on up to $1,500 in spending) on rotating categories each quarter when you activate the bonus.

Redeeming Discover Cash Back For Travel Gift Cards Is It A Good Deal

With the Discover it Card, You Can Earn $300 in Cash Back in Rotating Categories Each Year.  Then Discover Will Double It After Your 1st 12 Billing Cycles!

There are no foreign transaction fees so you can use it to make purchases abroad too!  Just keep in mind, Discover cards aren’t as widely accepted as other cards.

Danny can also check out my previous post for a list of more no annual fee cards that might work for him.

The Chase Sapphire Preferred Is Still My Favorite Card!

Link:   Chase Sapphire Preferred

Link:   My Full Review of the Chase Sapphire Preferred CardI still recommend the Chase Sapphire Preferred for Danny and other folks who are just starting out in this hobby, even though it DOES have an annual fee.  Here’s why:

No Annual Fee the 1st Year

The $95 annual fee is waived for the 1st year.  So you can try the card out for ~10 months to see if you like it.

Quick Tip How To Easily Improve Your Credit Score With An Early Payment

The Chase Sapphire Preferred Card Won’t Cost You a Dime for the 1st Year!  So You Can Keep Money in Your Wallet and Enjoy All the Benefits

If you like the card, you can pay the annual fee in the 2nd year, like I have for years because the benefits far outweigh the fee.  Otherwise, you can cancel with a quick phone call or by private message through your online account.

Terrific Benefits

When you sign-up for the Chase Sapphire Preferred card and spend $4,000 on purchases within the 1st 3 months of opening your account, you’ll earn 50,000 Chase Ultimate Rewards points.  (I’ll explain what that means in a moment!)

You’ll also get:

  • 5,000 bonus points when you add an authorized user who makes a purchase within the 1st 3 months
  • 2 Chase Ultimate Rewards points per $1 you spend on travel and dining
  • Primary car rental insurance – Covers damage or theft to your rental car, when you pay for the rental with your card
  • Trip delay reimbursement – Get up to $500 back per ticket when your trip is delayed more than 12 hours
  • No foreign transaction fees

Unlock Transfer Partners

Plus, with the Chase Sapphire Preferred (or Chase Ink Bold & Chase Ink Plus small business cards) you can get more out of your Chase Ultimate Rewards points.

You can redeem your points for hotels, airfare, and other travel booked through the Chase Travel Portal at 1.25 cents per point.  So the 50,000 Chase Ultimate Rewards points you earn could be worth $625 in flights booked through the Chase Travel Portal with no blackout dates!

Or better yet, you can transfer your points to airline and hotel partners for Big Travel:

 Chase Ultimate Rewards Airline Transfer Partners 
British AirwaysFlying Blue (Air France/KLM)Korean Air
Singapore AirlinesSouthwestUnited Airlines
Virgin Atlantic
 Chase Ultimate Rewards Hotel Transfer Partners 
HyattIHGMarriott
Ritz-Carlton
Rumor 100,000 Chase Ultimate Reward Point Sign Up Bonus With New Card Coming Soon

The Chase Sapphire Preferred Is the Only Personal Card That Gives You the Ability to Transfer Your Chase Ultimate Rewards Points to Airlines & Hotel Partners

Our Chase Ultimate Rewards points have helped us stay in beautiful Hyatt hotels in Goa, IndiaMilan, Italy, and Sydney, Australia.

Park Hyatt Milan

We Loved the Park Hyatt Milan and What We Enjoyed Even More Was Staying for Free by Transferring Our Chase Ultimate Rewards Points to Hyatt!

Get It While You Can!

Chase has become more strict with approving applications.  So some folks report their application was denied because they’ve applied for ~5+ cards in the past 24 months.

While there are exceptions, Chase has also added new language to the terms & conditions on their cards, which say:

Chase cardmembers who currently have or have had a Chase credit card in any Rewards Program associated with this offer, may not be eligible for a second Chase credit card in the same Rewards Program.

Chase cardmembers currently receiving promotional pricing, or Chase cardmembers with a history of only using their current or prior Chase card for promotional pricing offers, are not eligible for a second Chase credit card with promotional pricing.

So to play it safe, I recommend applying for the Chase Sapphire Preferred card FIRST!

Bottom Line

If you’re looking for a card with no annual fee, I recommend the Chase Freedom.  With this card you can earn 5X Chase Ultimate Rewards points (5% cash back) on up to $1,500 in spending in rotating categories like gas stations, restaurants, and Amazon each quarter.

The Discover it card is another great choice if you prefer cash back.  You’ll also earn 5% back on up to $1,500 in spending on rotating categories each quarter.  And new card members get all their cash back doubled at the end of their 1st year.  And there are no foreign transaction fees.

It’s important to have a no annual fee card to build a long credit history and establish a good relationship with the banks.

But I recommend signing-up for the Chase Sapphire Preferred card FIRST.  That’s because it gives you the ability to transfer your points to airline and hotel partners, for Big Travel with Small Money!  And there’s no annual fee the 1st year, so giving it a try won’t cost you anything.

In fact, even though I consider myself thrifty, I’ve paid the annual fee on the this and many other cards because the rewards are worth much more!

Thanks for your question, Danny!

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Editorial Disclaimer: Neither the responses below nor the editorial content on this page are provided or commissioned by the bank advertisers, and have not been reviewed, approved or otherwise endorsed by the bank advertisers. Opinions expressed here are the author’s alone, not those of the bank advertisers. It is not the bank advertisers’ responsibility to ensure all posts and/or questions are answered.

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10 responses to “What’s the Best No Annual Fee Card?

  1. I have (had) all of these cards. If the question is just “Which no fee card?”, then the best answer is: Citi Double. Pays 2% on everything — no quarterly bonus, no restrictions. Pays in cash to your statement.

    However — we don’t operate in a vacuum. That is why I have several cards, so I can cherry-pick the best cashback for each expense. I have the Discover (5% quarterly plus bonuses during the year; plus 2x rewards payout this June); and the Freedom (again, quarterly bonuses); and I would get the Ink Cash, for 5X rewards at Staples). All of these no AF.

    If I was willing to pay an AF (I will be in this situation this Fall), instead of the CSP, I prob. would get the Ink Plus Business card. Pays 5X at Staples, and being a premium card (like CSP) allows you to transfer Chase Ultimate Rewards points to partner airlines and hotels. You won’t pay the $95 AF until year 2 at least; when it comes up for renewal, you can request they wave (or refund) the year 2 AF.

    My 2 cents.
    Scott

  2. I too have had all the cards mentioned. In addition to Citi Double, the Fidelity Retirement Rewards Card (recently converted from American Express to Visa) also pays unlimited 2% right back into your Fidelity Cash account, also with no annual fee. I’ve had it for 10+ years and love it.

    For where I fly, 2% is a much better deal than any cards which give (or convert to) airline miles. If I shop carefully, I can fly economy coast-to-coast for $300 to $400, including all fees (same as 15,000 to 20,000 Fidelity points/spending). That’s the equivalent of 25,000 miles and $11.20 in fees with most airline points, if you happen to be able to find any “free flight” availability on the days you want to travel. Same is true for comparing Mexico/Caribbean fares to the 35,000 mile requirement plus ~$100 in fees or Europe fare to the 60,000 minimum mile requirement and often ~$200 in fees.

  3. Cliffs: You should really sign up for CSP so I make money. Oh hey, per Danny’s question, here are two no AF cards – Freedom and Discover – but again I recommend the CSP with an AF first and to do it soon HURRY HURRY HURRY!! Yeah I know, your initial inquiry was to ask me about no AF cards but I REALLY think you should get the CSP FIRST!!

    —–
    I counted at least 6 affiliate links to CSP. This post is the epitome of why seasoned people in the community tend to give bloggers a bad name. You’re approaching TPG territory. Your comments section (Scott) already mentioned an additional card (for everyday spend) AND another premium option for UR transfer ability. But you of course didn’t mention the INK Plus because you don’t receive commission. I probably subscribed to your site when I didn’t know much better. That time has come and gone and this will definitely be the last advertisement from MMS hitting my email.

    You initially acknowledge that newbies in many cases aren’t comfortable with AF cards until they’re more seasoned. You then post about how you still prefer the CSP and even go so far as to implicitly tell people to hurry and sign up as to avoid the 5/24 rule and that in conclusion they should sign up now because the first year is free. And no, the CSP benefits do NOT far outweigh the fee. For some of course it will, but to arrive at such a blanket statement is just asinine. I don’t normally (maybe ever?) give a blogger crap but in this case you deserve it.

    For anyone reading this, there’s also the new Fidelity Rewards Visa Signature with 2% cash back and supposedly comes in the form of Flex Perks, meaning up to 4% value depending on redemption. Another great no AF card is the Amex Blue Cash with 3% grocery up to $6k/year.

  4. anthonyjh21 –

    Your post is going to be deleted along with my post. CSP is highly overrated card because of bloggers. Dont go for it.

    No AF card – freedom and discover are having less affiliated links than CSP .

    If CSP is going to provide gas as one of the category without any cap, then it can be a good card ( not great one)

  5. I have about 7 cards right now and when I applied to Chase Sapphire, the denied me, saying “too many credit cards in the past two years.” Any suggestions on what to do? Cancel some cards or wait a while?

  6. Your link says nothing about the $50 bonus on Discover? Does the $50 get doubled also?

  7. It’s also worth mentioning the BankAmericard Travel Rewards card which has no annual fee and, in conjunction with Bank of America Preferred Rewards Platinum Honors Status, will net you 2.625% in travel rewards on all spending. (Or, with the Platinum Status (not Platinum Honors), it’ll net you 2.25% in travel rewards.)

  8. raj,

    I wouldn’t doubt it is deleted but hopefully they leave it up. After all, I did provide two alternative everyday cards that would be of value.

    @ Bruce

    Honestly, your best value is most likely going to be by continuing to open accounts rather than wait 1-2 years for Chase to even consider you. The opportunity cost here is huge if you hold off. It sucks, but personally I’d keep moving forward and use other programs and credit card providers to help facilitate your overall goals. Citi is a good place to start.

  9. I think the Capital One Quicksilver is way better than the two listed. I wonder if this post is sponsored by chase

  10. Put me down as one who thinks that CSP is the most overrated card on the market. At one time, it was quite revolutionary, but as other cards were matching its benefits and surpassing them, CSP was chipping away at its own benefits such as axing the 7% annual dividend and nixing the First Friday Dining bonus.

    While I would agree to get the CSP first when venturing into the world of cards with annual fees (only because of the aforementioned 5/24 rule), that’s only because of the signup bonus. After that, 2x points on travel and dining is quite a snoozefest.