Top No Fee Credit Cards

Usually when you are reading about credit card offers, you usually are reading about big bonuses with the first year waived. After that first year, most of us either downgrade, cancel or if the benefits outweigh the cost, actually pay the fee. For some, they might not want to open and close cards every year, not spend enough to meet some of the larger bonuses, or possibly can’t afford paying the fee on some of the premium cards. I think it is important for everyone (even if you play the credit card game) to have no fee credit cards. What are your options if you want a no fee credit card, but also want rewards? 


Credit score breakdown

Credit score breakdown

The length of your credit history accounts for 15% in the calculation of your credit score. Think of your credit history as a story, the longer the story the more details banks will see and if credit is managed responsibly, the better your score will be. No fee cards will help increase the length of your accounts, so you will have a better story to tell. This should be part of your long term credit card strategy if you churn cards as well.

What are the top credit cards that have no annual fee?

There are many credit cards out there and I am excluding credit cards that have a fee, but have that fee waived the first year. These are cards that have zero annual fees, but also earn rewards. I’ve selected cards that I felt are top no fee credit cards and have ranked them.

I know your spending could be different, but to keep spending equal, I used the Bureau of Labor Statistic, on average American spending:

No Fee Credit Cards
Category,Yearly Spend,Chase Freedom,Discover It,Barclay Arrival,American Express Everyday,American Express Blue Cash,Citi Double Cash,Barclay Sallie Mae
Groceries,$4000,8000,$40,4000,8800,$120,$80, $160
Dining Out,$2600,5200,$52,5200,3120,$26,$52,$26
Transportation Travel,$6600,6600,$66,13200,7920,$66,$132,$66
Healthcare Expenses,$3600,3600,$36,3600,4320,$36,$72,$36
All Other Expenditures,$3300,3300,$33,3300,3960,$33,$66,$33
Total,$26600,37200,$348,35800,35920,$370,$532, $482
Including Signup Bonus, $26600, 47200, $398, 55800, 45920, $470, $532,$507
*For the Chase Freedom and Discover it I used 2015 calendars. I split yearly spend equally between the year.

Card #7: Barclaycard Arrival

Decent option, but there are better ones!

Barclay recently made some negative changes toward this card and I personally don’t think it is worth getting. The sign up bonus pretty good for fee-free card and is worth $210 for a low spend of $1,000 in the first 90 days.

Redeeming against travel charges and you’ll redeem at 1 cent per point, if you chose non-travel charges it is 0.5 cents per point. The earning rate is only 2x on dining and travel, which is not a great option. If you include the sign up bonus you would earn 55,800 miles in the first year, which is around $585.90 in travel money. After the first year, you will earn 35,800 miles, which is around $376 in travel money. You need to redeem for a minimum of 10,000 miles and you receive a 5% rebate on redeemed miles.

The term miles is misleading for the Arrival, because you can’t transfer these miles to airlines or hotels, it is a fixed cash back travel credit card

There are no foreign transaction fees, so this could be an option if you travel internationally frequently. The sign up bonus makes this an appealing no fee card, but if you look past the bonus, you will see there are better options.

Card #6: Chase Freedom

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**Now, I am strictly speaking about the Chase Freedom. I am not considering if you are using the Freedom to transfer points to a premium Chase card to use for partner transfers. That would clearly change your rankings, but I am not looking at people who have premium Chase cards, I am only looking at the Chase Freedom.**

The Chase Freedom is similar to the Discover It in it’s earning rates. It has rotating 5% categories and you can use your points toward travel, gift cards or credit statements for 1 cent per point. Currently the best bonus is 10,000 points ($100) after spending $500 in the first 90 days. Every year, Chase increases the offer to 20,000 points ($200), so if you can wait for the increased bonus I would. You will even earn an extra 2,500 points ($25) if you were to add an authorized user.

In the first year, you would earn around 47,200 points ($472), after the first year your earnings would be around $372. You don’t want to use this card abroad because you will be charged a foreign transaction fee and there are cards you can use that won’t charge you when traveling internationally.  Ideally, you would want to use this card for the 5% categories and another card that earns more than 1% for non-bonus spend.

Card #5: Discover It

Screen Shot 2015-02-21 at 8.32.39 PM

Discover has great customer service and the structure of the card is similar to the Chase Freedom. It has rotating 5% categories and redemption options are some of the best for cash back. Discover occasionally has a $150 sign up bonus, but currently that is not available. The best bonus currently is $50, which isn’t great but if you are a new cardholder, all your cash from your first year is doubled.

Discover has one of the best cash back redemption options around, because you can redeem any amount of cash back, even $0.01. Most banks require $25 or even more to cash in your cash back earnings. If you redeem for gift cards, you can make out even better.

In the first year, you would earn around $398, but that becomes $796, after the first year you’ll earn about $348. There are no foreign transaction fees when using abroad, which is great for a no fee card to have. These earnings will change depending on the rotating categories Discover chooses for the year. Similar to the Freedom using this card with others and maximizing the 5% categories is where you’ll make the most. If you are enrolled in the double everything promotion, this could be good for you to use for the year.

Card #4: American Express Blue Cash

Screenshot 2015-09-06 at 9.29.44 AM

This is a solid card for people who spend more money on gas and groceries because it earns 3% on groceries, 2 % on gas and 1% everywhere else. You can redeem your cash back for gift cards or credit statements, in $25 increments. Occasionally, you will see gift cards you can buy at a reduced cost, to make your cash back to a little further.

One of my favorite American Express benefits is the American Express Offers and you can load those offers onto the Blue Cash. It’s another way to save more on purchases you were initially going to make.

In the first year, you would earn around $470 and after the first year you would earn around $370. The yearly earnings are very similar to the Chase Freedom, but the American Express Offers add more to this card and is why I put it ahead of the Chase Freedom. You would not want to use this card abroad, because you will be charged a foreign transaction fee. If you spend more on groceries and gas and prefer cash back, this card should be on your radar.

Card #3: Barclay Sallie Mae

Screenshot 2015-09-11 at 2.54.04 PM

I initially forgot about the Sallie Mae credit card, until Dan left me a comment about it. He was absolutely right!

The Sallie Mae credit card is a solid option for people who spend more money at the grocery store or on gas because each earn 5% on the first $250 spent each month! After reaching the $250 limit, you’ll earn 1% the rest of that month. You’ll earn only 1% on all other transactions as well. You can redeem your cash back in $25 increments for statement credits, cash back into an Upromise account, or as a statement credit for eligible student loans.

In the first year you’d earn about $507 in cash back, because it comes with a $25 sign up bonus (occasionally there have been offers for $100 bonus) and after the first year you’d earn about $482. There is a foreign transaction fee, so if you plan to travel abroad, I’d leave this card at home. This card would be a great for someone who doesn’t mind juggling a few 5% cards (in addition to the Discover and/or Chase Freedom), or for someone who spends most of their money at gas and grocery stores.

Card #2: Citi Double Cash

Screen Shot 2015-01-22 at 8.40.12 PM

My biggest complaint against the Citi Double Cash is the lack of a sign up bonus, but outside of that, this card is great. Even without a sign up bonus this card earns more than the cards above year after year.

You earn 1% on all purchases and 1% when you make a payment on those purchases, making this a 2% card on all purchases (as long as you don’t hold a balance!). You can redeem your cash back for gift cards, credit statement or even have it deposited to your bank account (in $25 increments). It is pretty hard to beat 2% on every transaction.

Even without a sign up bonus, you would earn around $532 in your first year, as well as the following years. This is a great card for people who only want a single card and don’t need to worry about multiple cards with bonus categories. This card would be a great addition to use for all your non-bonus spending, because at 2% back, that is pretty hard to beat.

The Top No Fee Credit Card: American Express Everyday

Screenshot 2015-09-06 at 10.28.04 AM

The most significant difference between this card and the others above, is the points from this card be transferred to one of American Express 16 airline partners and 4 hotel partners. All the others above are cash back credit cards. Those transfer partners can make your points worth even more, since they are a dynamic travel currency. I value Membership Reward points at 1.7 cents per point.

The sign up bonus is decent at 10,000 Membership Reward points after spending $1,000 in the first 90 days and you can also use American Express Offers to save even more money! This card earns 2 Membership Reward points per dollar spent at US grocery stores and 1 Membership Reward point everywhere else. Once you reach 20 transactions in a month, you will receive an extra 20% bonus on those points. Making it 2.2 (3.7% earning rate) Membership Reward points per dollar at US grocery stores and 1.2 (slightly over 2% earning rate) Membership Reward points every where else.

In the first year, you would earn 45,920 Membership Reward points, which I value around $780. After the first year, you would earn 35,920 Membership Reward points, which is around $610! That is a great amount for a no fee credit card, especially since you can use these points on transfer partners. This card does charge a foreign transaction fee, so I would not use this internationally. The value of this card is very hard to beat and is the only fee free card I know of that allows you to transfer points to transfer partners.


In the end, it really depends on your goals and how many cards you are willing to juggle to earn the most. Many of the cards on this list are great complements to each other and you can really maximize earnings with a few of them. There is no reason you should be earning at least 2% on all your purchases or if you prefer to travel, you even have an opportunity to earn flexible bank points! There are plenty of credit cards that allow you to earn rewards and pay no annual fee.

Do you agree with my rankings? What is your favorite no-fee credit card?

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2 Responses

  1. Dan says:

    I’m really surprised you didn’t include the Sallie Mae MasterCard on the list, or at least give it an honorable mention. It actually would’ve come out on top in both the gas and groceries categories with the annual spends you listed.

    For gas, the cash back is $120 on a $2400 annual spend ($2400 x 5%)

    For groceries, the cash back is $160 on a $4000 annual spend ($3000 x 5% + $1000 x 1%)

    It’s true that it only has a $25 signup bonus, but this is a great card to keep in your collection that will help build credit length/history and has no annual fee.

    • Dustin Waller says:

      You know what Dan, I totally forgot about the Sallie Mae card! I have adjusted my post and included it because it definitely deserves to be on the list!

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