No Annual Fee Credit Cards

Why choose a card with no annual fee?

A no annual fee card costs nothing to keep open, whether you use it every day or once a month. That makes it a good everyday card, a backup for when your main card is lost, or a first card while you build credit.

Keeping a card open also helps your credit over time. The age of your accounts and how much of your available credit you use both count toward your score, and a free card you never have to close helps with both.

Do no annual fee cards earn less?

Sometimes they earn a little less than cards with a fee, but for most people a no-fee card comes out ahead. Here's a simple way to check. Say you spend $500 a month on groceries, or $6,000 a year. A card that pays 1% more on groceries earns you an extra $60 a year. If that card's annual fee is more than $60, the no-fee card wins.

Run that math with your own spending before paying for a card. Unless you spend a lot in the bonus categories or use the card's perks, a no annual fee card usually gives you more for less.

Is a no annual fee card good for building credit?

Yes. Many starter and secured cards have no annual fee, and they're often recommended for limited or fair credit. Use the card for a small bill or two each month, pay it in full and on time, and keep the balance low compared to your limit.

After several months of on-time payments, your score has a track record to work with. Since the card is free, you can keep it open for years, which helps the length of your credit history.

How do you pick a no annual fee card?

Start with what you want the card to do. For rewards, match the card to your biggest spending, like groceries or gas, or pick a flat rate on everything. For a big purchase, look for a no-fee card with a 0% intro APR. For trips abroad, look for no foreign transaction fees.

Then pay the balance in full each month so interest doesn't cancel out the savings. The guides below cover first cards, credit building and choosing between no-fee options.