A no annual fee credit card is a type of credit card that does not charge a fee for access to credit. The fee can be waived for an introductory period, or for the life of the card (often with a minimum yearly spend). A no annual fee card can help save between $29 and $450 per year in fees.
Card providers charge an annual fee to give customers access to credit and the various perks, rewards, and features a card may offer the holder. A no annual fee credit card doesn’t charge a fee for holding the card, either as part of an introductory period or for the life of the card (usually with a minimum spend).
A no fee introductory offer waives the card’s annual fee for a specific period (usually one year) before reverting to the card’s standard annual fee.
An introductory offer can often be beneficial if combined with a balance transfer - allowing the cardholder to try out the card for free while repaying the transferred balance. Just be aware of the card’s standard annual fee, and whether you can afford this, before making the decision to keep the card beyond the introductory period.
Other types of no fee credit cards will require you to spend a certain amount on the card each year before waiving the annual fee.
Minimum spend offers are generally for the life of the card, and as long as you can afford to spend this amount – and you pay it off each month before it starts accruing interest – this can provide an easy way to make use of the card’s features while saving on ongoing fees.
To qualify for a no annual fee credit card you must meet the following qualifying criteria:
Even if you meet basic qualifying criteria, some lenders may have specific eligibility requirements such as:
Qualifying criteria will vary between lenders and cards, so it’s important to compare no fee credit cards before applying to ensure you are eligible.
You can apply for a no annual fee credit card online, over the phone, or at your bank. A key part of the application process is demonstrating that you have the income and assets to repay the full credit limit. To do this, you may need to provide:
If you are self-employed, you will need to provide previous tax assessments instead of payslips. You may also need to provide information about your accountant.
Choosing a no fee credit card can offer many benefits in the right circumstances. How you plan to use your card will help determine whether a no fee card is suitable for your personal situation. Things to consider when choosing a no fee credit card include:
No annual fee credit cards may appear cheaper than other cards, however there are various fees a cardholder may be liable for:
The interest rates for no annual fee credit cards range from 8.99% to 21.99%.
Interest is generally calculated daily on the balance owing and is charged once per month. Interest is charged on top of an annual fee - even if you hold a no fee credit card, you will still pay interest on your balance until it is repaid.
No Annual Fee credit cards have a minimum credit amount of $500, and a maximum credit limit of $100,000. The amount of credit that you can access from a lender is determined by your:
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While a no fee credit card may not include the same level of perks and features as other credit cards, they still offer various benefits in certain situations. People often choose no fee credit cards if they:
No annual fee credit cards have the same features and purchase rates as other cards and can come with multiple types of rewards structures. The annual fee can be waived as part of a promotional period (often up to one year) or it can be waived for the life of the credit card. No annual fee credit cards are not suitable to be used for regular cash advance withdrawals.
In summary, no annual fee credit cards:
Credit card providers charge an annual fee to give cardholders access to credit. A no fee card waives this annual fee either for an introductory period, or for the life of the card and generally with a minimum yearly spend.
You can cancel your no fee credit card before the end of the introductory period, however you should check the cancellation process with your credit card issuer to ensure you are not liable for any additional fees.
As with all credit cards, the best no fee card is the one which suits your spending habits, income, and provides the most benefits for your personal circumstances. Compare no fee cards before applying to find the best card for you.
While no fee credit cards generally do not include rewards, there may be a few available which do. Be aware that no fee cards with rewards or features will generally include a higher purchase rate than those without.
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