Best No Annual Fee Credit Cards of 2023

Credit Cards
No annual fee cards

When employed prudently, credit cards can serve as potent financial instruments. Beyond the essential consumer protections and assurances that many credit cards provide, they also enable you to earn rewards for your spending. Some credit cards go a step further by offering a 0% APR for a specified period.

Remarkably, many of these credit cards with valuable benefits do not impose an annual fee. RBO Loans conducted an in-depth analysis of the leading no-annual-fee cards to determine which ones offer the most comprehensive rewards programs and benefits that consumers can fully leverage.

Best No annual fee cards offers

The Chase Freedom Flex℠, while technically a cash-back card, offers an impressive 5% rewards rate for travel booked through Chase. This feature makes it a versatile and valuable option for travelers.

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Pros and cons

Pros

Lucrative Cash Back Categories: This card provides an opportunity to earn substantial cash back with 5% cash back in rotating bonus categories that change every three months (on up to $1,500 per quarter in spending, then 1%). Additionally, it offers 5% cash back on travel booked through Chase, 3% cash back at restaurants and drugstores, and 1% cash back on other purchases.
Generous Sign-Up Bonus: New cardholders can enjoy a sign-up bonus of Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.
Reward Transfer: If you possess one of Chase's Sapphire cards, you can transfer your cash back rewards to it, potentially enhancing their value and flexibility.

Cons

Bonus Category Management: Activating and keeping track of the rotating 5% cash back categories can be a bit cumbersome for some cardholders.
Foreign Transaction Fee: This card imposes a foreign transaction fee, making it less suitable for international travel or expenses abroad.
Limited Travel Benefits: As a cash-back card, it lacks the travel-specific perks offered by some other cards, such as travel insurance, airport lounge access, or complimentary checked bags.

The Chime Credit Builder Visa® Credit Card doesn't require a minimum deposit or charge an annual fee, making it an accessible option for building credit. However, it's important to note that you must be a Chime banking customer to apply for this card.

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Pros and cons

Pros

No Security Deposit: Unlike many secured credit cards, the Chime Credit Builder Visa Credit Card doesn't require a security deposit. Instead, it's backed by the money in a linked account. You can add funds to this account at any time.
No Credit Check: You don't need a good credit history or credit check to apply for this card, making it accessible to individuals with limited or poor credit.
Builds Credit: This card is designed to help you build or rebuild your credit history. Your payment activity is reported to the major credit bureaus, which can positively impact your credit score over time if you make on-time payments.
Automatic Payments: You can set up automatic payments from the linked account, ensuring you never miss a payment.

Cons

Limited to Linked Account: The card is tied to the money in your linked account, which means you can't spend more than what you have in that account. While this prevents overspending, it may not fully prepare you for handling traditional credit cards with credit limits.
Different from Traditional Cards: The safety features that prevent overspending can also limit your understanding of how traditional credit cards work. When you graduate to a regular credit card, the experience will be different.
Complaints About Freezing Funds: Chime has faced complaints about freezing customers' funds, which can be frustrating and inconvenient.

The Discover it® Secured Credit Card stands out as the top choice among secured credit cards due to its attractive rewards program, absence of an annual fee, and the potential for account upgrades.

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Pros and cons

Pros

Rewarding Cash Back: This secured card offers an impressive cashback program, with 2% cash back on dining and gas (up to $1,000 in combined quarterly spending) and 1% on all other purchases.
Upgrade Potential: Discover automatically reviews your account after seven months, providing an opportunity to upgrade to an unsecured card if you've managed your account responsibly.
No Annual Fee: This card comes with no annual fee, making it an affordable choice for building or rebuilding credit.

Cons

Initial Deposit Requirement: To open this card, you must make an initial deposit, and it must be funded from a bank account. This could be a barrier for those who are unbanked.
Credit Limit Limitations: The card's credit limit ranges from $200 to $2,500. Some applicants may find these limits insufficient for their needs, especially if they require a higher credit limit.

Capital One SavorOne Student Credit Card

The Capital One SavorOne Student Cash Rewards Credit Card stands out among student cards with its combination of triple rewards in popular categories and a $0 annual fee.

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Pros and cons

Pros

Earn 8% cash back on Capital One Entertainment purchases.
Get 3% cash back on dining, entertainment purchases, eligible streaming services, and store purchases.
Earn 1% cash back on all other purchases.
Excellent ongoing rates, especially for a card in this category.

Cons

New credit users may find it challenging to keep track of multiple bonus categories, preferring a simpler flat-rate rewards card.

FAQ

What is a no-fee credit card?

A no-fee credit card, also known as a no-annual-fee credit card, is a type of credit card that does not charge an annual fee for card membership. Annual fees are recurring charges that some credit card issuers impose simply for the privilege of holding and using their credit card.

No-fee credit cards are appealing because they allow cardholders to access credit without incurring an additional cost each year. These cards are particularly beneficial for individuals who want to avoid ongoing fees and are looking for a straightforward and cost-effective way to make purchases, build credit, and potentially earn rewards or benefits.

Can I get a credit card with no annual fee if I have bad credit?

Yes, you can potentially get a credit card with no annual fee even if you have bad credit. Some credit card issuers offer no-fee credit cards specifically designed for individuals with less-than-perfect credit. These cards are often referred to as "secured credit cards."

Secured credit cards require a security deposit, which typically becomes your credit limit. Because the issuer holds this deposit as collateral, they are more willing to extend credit to individuals with bad credit or no credit history. While secured cards may not offer the same rewards and benefits as unsecured cards, they can be an effective tool for rebuilding your credit and eventually qualifying for a no-fee unsecured credit card. Over time, responsible use of a secured card can help improve your credit score, making you eligible for better credit card offers with no annual fees.

Is a no-annual-fee credit card worth it?

Evaluating whether a credit card is worthwhile involves assessing whether the benefits it offers outweigh the costs associated with it. When a card has no annual fee and provides rewards that surpass its costs, the decision appears straightforward. For instance, if a card with no annual fee yields $100 in rewards for your spending, it seems like a good choice.

However, introducing an annual fee adds complexity. A card with a $50 annual fee but generating $200 in rewards may be a better option, leaving you $150 ahead. Evaluating worthiness involves comparing different cards, considering their fees, rewards, and competing alternatives in the market.

The prevalence of annual fees varies among credit card types:

Cash Back Credit Cards: Most top cash back credit cards don't have an annual fee, except for some with exceptional rewards rates in specific spending categories.
Airline Credit Cards: Many airline credit cards charge an annual fee, justified by benefits like free checked bags and priority boarding.
Low Interest and Balance Transfer Cards: These cards typically don't have annual fees, aligning with their focus on saving money on interest.

Ultimately, the decision to opt for a card with no annual fee or one with a fee involves personal preferences. Some individuals prefer to avoid annual fees altogether, considering them upfront costs with uncertain returns. In such cases, a no-annual-fee card becomes a logical choice.

Should you get a no-annual-fee credit card?

Opting for a credit card with no annual fee may be a sensible choice under various circumstances:

Limited Card Usage: If you don't plan to use the card extensively and primarily need it for emergencies or to establish a credit history, a card with no annual fee is a practical option. This is particularly true if you don't spend enough to offset the cost of an annual fee.
Preference for Simplicity: For individuals who prefer simplicity and don't want to worry about justifying or recouping the costs associated with a card's annual fee, a no-annual-fee card is a hassle-free choice.
Concerns About Upfront Expenses: Annual fees on credit cards can range from $90 to $100, or even higher. If the prospect of a substantial upfront expense without an immediate return is a concern, a no-annual-fee card aligns with a more comfortable financial approach.

Can I get the annual fee waived on a credit card?

It's worth noting that any credit card can effectively become a no-annual-fee card if you successfully negotiate with the issuer to waive the fee. Credit card issuers, especially if you're considered a valuable customer, may be willing to accommodate your request to retain your business.

Here are some strategies you can consider:

Negotiate a Fee Waiver: Contact your credit card issuer and politely inquire about the possibility of waiving the annual fee. If you are a valued customer and demonstrate regular card usage, they may be willing to accommodate your request.
Explore Retention Offers: Instead of a fee waiver, you might be eligible for a retention offer. This could involve earning a bonus that offsets the annual fee. Similar to sign-up bonuses, retention offers typically require a specified amount of spending within a specific timeframe.
Consider a Product Change: If you have a credit card with an annual fee that you find challenging to justify, inquire about the option to downgrade to a no-annual-fee card offered by the same issuer. This is known as a product change and can often be arranged by contacting the issuer and exploring available alternatives