There are around 20 rewards credit cards on the market that don't charge an annual fee.
Many cards in this category give you a $0 annual fee in the first year only. But some never charge an annual fee.
No annual fee rewards cards don't come with bonus point offers. But you can earn reward points on your spending.
Types of no annual fee credit cards with rewards
Promotional $0 annual fee rewards cards. Some rewards credit cards and frequent flyer credit cards offer a waived or reduced annual fee during the first year. You typically have to pay the full annual fee from the second year onward. This makes it important to look for details or disclaimers on any promotions so that you're aware of any ongoing costs that apply after the first 12 months.
No annual fee rewards program cards. These cards usually offer points as part of a credit card rewards program such as the American Express Membership Rewards. These programs offer rewards that usually include travel, merchandise, cash and point transfers to frequent flyer programs.
No annual fee frequent flyer credit cards.Frequent flyer credit cards offer great rewards for regular globetrotters. These are similar to rewards cards in the way they earn points per dollar spent, except that you can only redeem your points within the frequent flyer program of that specific airline. A few frequent flyer credit cards charge no annual fees, including the Qantas American Express Discovery Card.
Pros and cons of no annual fee credit cards with rewards
Pros
Rewards for your spending. These cards earn frequent flyer or credit card points for every $1 you spend on eligible purchases, which you can use to get flights, gift cards, cashback and other rewards.
Savings on account costs. A $0 annual fee means you'll save on a common cost for rewards cards – especially when you consider these cards typically have higher annual fees than other types of credit cards.
Introductory offers and deals. Some cards come with bonus points offers when you meet the spend requirements, or introductory 0% interest rate promotions that can give you extra value when you apply for a new card.
Perks. Some of these cards offer complimentary insurance, concierge services and other perks that can give you extra value (if you use them). But they may not offer as many perks as rewards cards that charge an annual fee.
Cons
Limited points potential. Credit cards with no annual fee and rewards typically have smaller bonus points offers and earn fewer points per $1 spent, especially if it's an ongoing $0 annual fee.
Higher interest rates. With the combined benefit of no annual fee and points, these cards typically charge higher ongoing interest rates than other cards. So if you carry a balance on your credit card, the interest charges could outweigh the value you get from it.
Potential costs after the first year. Rewards credit cards that offer no annual fee in the first year often charge an annual fee from the second year. Weigh this cost against the value you've got from points and perks to decide if it's worth keeping the card after the first year.
Our expert says: Who benefits from a no annual fee rewards card?
"It's a general rule with credit cards that the better the rewards or points on offer, the higher the annual fee. No annual fee rewards are a nice exception. While these cards will never have the biggest points offers, they are great for cost-conscious customers who want to earn some points but don't want to spend big or pay high annual fees."
Is a no annual fee rewards credit card right for you?
Rewards cards with no annual fee suit people who:
Want to earn some rewards with their credit card spending.
Don't want to pay an annual fee.
Don't care about earning a large bonus points offer when signing up for the card.
These cards are not as suitable for:
Big spenders who want to maximise the points they earn (paying a higher annual fee could work out better for this kind of customer because they earn enough points to outweigh the fee).
People who want to earn bonus points when signing up to a new card.
Earning points is only really worth it if you can use them, so it's worth looking at what types of rewards are available and how many points you need to redeem them. Then, you can estimate how long it would take you to get enough points based on what you'll charge to the card.
Keep in mind: Some credit cards waive the annual fee in the first year but charge you a fee in the second year. You can still get a lot of value out of these cards, but don't forget to factor in the cost of that fee in later years.
Bottom line? If you don't want to spend much on a credit card but do want to earn rewards, then a card with an ongoing $0 annual fee can be worth it. But if you have serious rewards goals – or don't think you'll spend enough to get value from points – looking at other types of cards could help you find one that works for you.
How to make sure you're getting a good deal
Beyond points and no annual fee, make sure you weigh up the following features when you're comparing these cards.
Purchase rate. If you carry a balance on your credit card, a high purchase rate can result in exorbitant interest fees over time. With 0% purchase rate promotional offers, the standard purchase rate will kick in once your promotional period is over.
Interest-free days. Most credit cards offer a set number of interest-free days for purchases during each statement period when you pay the total balance listed on each statement. On a no annual fee credit card with rewards, this gives you another way to save on credit card costs as you earn points.
Points caps. Some rewards credit cards limit the amount of points you can earn each statement cycle or year. Make sure you consider this cap before choosing a card, so that you can find one that offers the most convenient limits based on your spending habits.
Other fees. Other fees, such as ATM fees, late payment charges and over-limit fees, may be applied to your account. International transaction fees will also apply to overseas transactions and internet purchases made with foreign merchants.
Amy is an experienced journalist with over 16 years of experience, contributing to major publications like Money Magazine, The Sydney Morning Herald, and ABC News Australia. Specialising in personal finance, she frequently appeared in media outlets and on radio. Amy holds a Bachelor of Arts in Journalism and Drama from Griffith University and earned RG146 certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, ensuring her expertise is grounded in current financial regulations. Amy was Finder's Senior Writer for Credit Cards from 2016 to 2024.
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