No annual fee credit cards with rewards

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

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."

Richard Whitten

Senior Money Editor

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.

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.

Frequently asked questions

• Can you get a rewards credit card with no annual fee?

  Yes. Some cards charge a $0 annual fee for as long as you hold them and still earn points on eligible purchases, often through a store loyalty program or a card provider's own rewards program. Others only waive the fee in the first year, so check the ongoing annual fee in the card's details before you apply.

• Do no annual fee rewards cards charge a fee after the first year?

  Some do. Cards with a promotional $0 annual fee usually charge the full annual fee from the second year, while cards with an ongoing $0 annual fee don't. If you choose a first-year offer, set a reminder before the anniversary so you can decide whether the points and perks are still worth the fee.

• Are no annual fee rewards cards worth it?

  They can be if you pay off your balance in full each month and use the card for everyday spending. You earn points without an annual fee eating into their value. But if you carry a balance, the interest charges will usually outweigh any rewards, and big spenders may get more value from a card with a higher earn rate, even after paying an annual fee.

• Do I earn points on every purchase?

  Usually not. Most cards don't earn points on cash advances, balance transfers, fees or interest, and many earn fewer points or none at all on government payments such as tax bills. Check the card's terms for excluded transactions and any points caps before you apply.

• Do credit card reward points expire?

  It depends on the rewards program. Some programs let you keep your points for as long as your card account is open, while others expire points after a set period. Frequent flyer points can also expire: Qantas Points expire if you have no earning or redemption activity on your account for 18 months.

• Will applying for a no annual fee rewards card affect my credit score?

  Each credit card application is recorded as an enquiry on your credit report, and several applications in a short time can lower your credit score. To limit the impact, check the eligibility requirements first and only apply for a card you're likely to be approved for.

• Can I switch my current credit card to a no annual fee rewards card?

  Many banks let you switch to a different card they offer, which may not need a full new application. But a product switch usually won't make you eligible for new customer offers such as bonus points. If you switch to a card with a different provider, you'll need to apply and may be able to move any existing balance with a balance transfer.

To make sure you get accurate and helpful information, this guide has been edited by Richard Whitten as part of our fact-checking process.

Written by

Amy Bradney-George

Journalist

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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. See full bio

Amy's expertise

Amy has written 425 Finder guides across topics including:

• Credit cards
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