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Credit Cards With No Annual Fee

4 min read
Last Updated: July 30, 2024
Getting a credit card

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Key Takeaways

  1. Credit cards with no annual fee can save you money.

  2. The best no annual fee credit cards offer rewards.

  3. You may decide to pay an annual fee if the card’s benefits make paying the fee worthwhile.

If you’ve been drawn to a credit card because of the perks it offers, you’re not alone. Credit card issuers will offer certain perks to entice new customers to apply for a card, like cash back rewards for everyday purchases, or extra cash back on specific items or categories. Some credit card companies charge an annual fee for you to use the card and take advantage of the perks. However, some credit cards have no annual fee.

With Discover, you can get all the rewards with no annual fee. Instead of paying for your rewards with annual fees, keep more money in your pocket.

Every Discover Card lets you earn rewards on every purchase, with no annual fee.

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The benefits of no annual fee credit cards

No making up the cost of the fee

They say there is no free lunch, and this is especially true when it comes to annual credit card fees. For example, say you opt for a card that charges you several hundred dollars a year to use it, but your rewards might amount to less than the annual fee cost for that card. Your job is to figure out if the benefits outweigh the costs.

A lot of this is going to be specific to your spending habits. For example, if you drive often then a no annual fee card that gives a higher level of rewards at gas stations, like the Discover It® Chrome Gas & Restaurants Card, makes a lot of sense. With the Discover it® Chrome Gas & Restaurants credit card, you can earn cash back on your next road trip with 2% cash back at Gas Stations and Restaurants, on up to $1,000 in combined purchases each quarter.1

What’s more, just because some cards charge an annual fee and offer amazing rewards doesn’t mean it’s easy to use them. If it takes several calls to customer service and a long time on the card issuer’s site to find redemption instructions, it may not be worth the hassle. It’s also important to note that benefit packages change, and some perks that come with annual fee cards like miles or hotel points can be subject to blackout dates.

More budget flexibility

When you have a no annual fee credit card, you may have more flexibility with your budget. Unlike monthly fees like rent, student loans, and electric bills (which you may be in the habit of paying regularly), once-yearly fees may come as a surprise.

You can still earn rewards

If you think that no annual fee credit cards don’t let you earn rewards, you couldn’t be further from the truth. Cards such as the Discover It ® Cash Back credit card offer cash back rewards on every purchase, yet don’t have an annual fee. With the Discover it® Cash Back credit card, you earn 5% cash back on everyday purchases at different places you shop each quarter, up to the quarterly maximum when you activate.

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The best no annual fee credit cards

Cash back credit cards

Cash back cards make some of the best no annual fee credit cards. Not only do you save money on annual fees, but you also earn valuable cash back on purchases. This type of card can help your budget even while you spend.

Travel credit cards

No annual fee credit cards are great choices for frequent business or personal travelers. If you find yourself spending more and more on traveling, there’s a no annual fee travel card out there for you. For example, the Discover It Miles® Credit Card has no annual fee and you can turn Miles into cash. Or redeem as a statement credit for your travel purchases like airfare, hotels, rideshares, gas stations, restaurants and more.2

Secured cards

If you’re looking to build a credit history, getting rid of annual fees leaves more money for you to keep up with monthly payments. The Discover It® Secured Credit Card can help you build credit with responsible use.3

 

In addition to having no annual fee, the secured card also offers cash back rewards on purchases.

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  1. 2% Cash Back at gas and restaurants: You earn a full 2% Cashback Bonus® on your first $1000 in combined purchases at Gas Stations (stand-alone), and Restaurants each calendar quarter. Calendar quarters begin January 1, April 1, July 1, and October 1. Purchases at Gas Stations and Restaurants over the quarterly cap, and all other purchases, earn 1% cash back. Gas Station purchases include those made at merchants classified as places that sell automotive gasoline that can be bought at the pump or inside the station, and some public electric vehicle charging stations. Gas Stations affiliated with supermarkets, supercenters, and wholesale clubs may not be eligible. Restaurant purchases include those made at merchants classified as full-service restaurants, cafes, cafeterias, fast-food locations, caterers, and restaurant delivery services. Restaurants located inside of or affiliated with another business, such as hotels or retail stores and establishments classified as a bakery, may not qualify. Purchases must be made with merchants in the U.S. To qualify for 2%, the purchase transaction date must be before or on the last day of the offer or promotion. For online purchases, the transaction date from the merchant may be the date when the item ships. Rewards are added to your account within two billing periods. Even if a purchase appears to fit in a 2% category, the merchant may not have a merchant category code (MCC) in that category. Merchants and payment processors are assigned an MCC based on their typical products and services. Discover Card does not assign MCCs to merchants. Certain third-party payment accounts and digital wallet transactions may not earn 2% if the technology does not provide sufficient transaction details or a qualifying MCC. Learn more at Discover.com/digitalwallets. See Cashback Bonus Program Terms and Conditions for more information.

  2. Redeem Miles: Starting at 1 Mile, you can redeem your Miles as a credit to your account to pay for all or part of your bill, for cash as an electronic deposit to your bank account, or for a credit for Travel Purchases made on your statement within the last 180 days. Each Mile is equal to $0.01. Miles cannot be redeemed directly with a specific airline carrier. Travel Purchases include airline tickets, hotel rooms, car rentals, travel agents, online travel sites, commuter transportation, restaurants and gas stations. Restaurant purchases include those made at merchants classified as full-service restaurants, cafes, cafeterias, fast-food locations, and restaurant delivery services. Gas Station purchases include those made at merchants classified as places that sell automotive gasoline that can be bought at the pump or inside the station. Gas Stations affiliated with supermarkets, supercenters, and wholesale clubs may not be eligible.

    Even if a travel purchase on your statement appears to fit in a Travel Purchase category, the merchant may not have a merchant category code (MCC) in a Travel Purchase category. Merchants and payment processors are assigned an MCC based on their typical products and services. Discover Card does not assign MCCs to merchants. Certain third-party payment accounts and digital wallet transactions may not be eligible for credit redemption if the technology does not provide sufficient transaction details or a qualifying MCC. See Terms and Conditions for more information.

  3. Build credit with responsible use (Secured): Discover reports your credit history to the three major credit bureaus so it can help build/rebuild your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build/rebuild credit.

  4. There is no hard inquiry to your credit report to check if you’re pre-approved. If you’re pre-approved, and you move forward with submitting an application for the credit card, it will result in a hard inquiry which may impact your credit score. Receiving a pre-approval offer does not guarantee approval. Applicants applying without a social security number are not eligible to receive pre-approval offers. Card applicants cannot be pre-approved for the NHL Discover Card.

  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

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