One of the main takeaways of this blog is that you can get tons of value from using credit cards wisely. Cards with annual fees often provide the most value. However, there are some people who don’t like or want annual fees. These people are willing to avoid them at all costs but still want to earn rewards. This post highlights some of the best no annual fee credit cards.
All of these cards are Tier II cards because they don’t have an annual fee, but they earn rewards. The beauty of having Tier II cards is that they serve as a foundation for your credit history. You can keep these cards open forever and maintain your credit score.
Bonus Categories
Chase Ink Business Cash
The Chase Ink Business Cash is one of the best no annual fee business credit cards in the industry. It earns 5x Ultimate Rewards (UR) points at Office Supply Stores as well as on Phone, TV, Cable, and Internet Bills. Plus, it earns 2x UR points at Gas Stations and Restaurants, as well as one point per dollar on non-bonus spend. This is an awesome earning structure for a no annual fee card!
Furthermore, the Ink Business Cash comes with a sign-up bonus worth 50,000 UR points. You must spend $3,000 within the first three months to earn the bonus. This is one of the highest bonuses in the industry among no annual fee cards.
You can transfer your points to a Chase Sapphire card or an Chase Ink Business Preferred card if you decide to open either of them later. This lets you take advantage of Chase’s transfer partners and travel portal. You can’t transfer your points directly from this card.
American Express Everyday Card
The American Express Everyday Card is the only no annual fee personal card that lets you directly transfer points of any sort to travel partners.
The Everyday Card earns 2x Membership Rewards (MR) points at Grocery Stores and just one for all other purchases. You will receive a 20% points bonus on all transactions if you use your card at least 20 times per calendar month. This points bonus gives you the potential to earn 2.4x points at Grocery Stores and 1.2x points for all other purchases.
Furthermore, the Everyday Card also has a sign-up bonus worth 10,000 MR points. It can be earned after spending just $1,000 within the first three months. The card also comes with a 0% intro APR period that lasts 15 months.
Citi Rewards +
The Citi Rewards + earns 2x Thank You (TY) points at Gas Stations and Grocery Stores. But the highlight of this card comes from the rules of rounding. Citi rounds up the amount of points earned to the nearest 10 for all purchases. For example, if you spend $1 at a convenience store, you will earn 10 points. This makes the Rewards + the best card in the industry for small purchases.
Furthermore, the Rewards + also offers a sign-up bonus worth 15,000 points. It can be earned after spending $1,000 in the first three months. This bonus is similar to the one from the American Express Everyday Card.
You can transfer your points to a Citi Prestige or Citi Premier account if you decide to open either of them later. This lets you take advantage of Citi’s transfer partners and travel the world for less. You can’t directly transfer to Citi’s partners (except JetBlue) with this card.
5x Rotating Categories
Chase Freedom Flex
The Chase Freedom Flex is a great option if you’re interested in earning Chase Ultimate Rewards (UR) points. You will earn 5x UR points on rotating quarterly categories as well as Travel from the Chase Travel Portal. There is a spend limit of $1,500 per quarter for each category.
The last four categories are as follows:
- 4th Quarter 2020: Walmart & Pay Pal
- 3rd Quarter 2020: Amazon.com & Whole Foods purchases
- 2nd Quarter 2020: Grocery Stores, Gym Memberships, & Health Club Expenses
- 1st Quarter 2020: Gas Stations, Walgreens, & CVS
But that’s not all! The Freedom Flex earns 3x UR points on Dining and Pharmacy purchases, as well as one point per dollar on non-bonus expenses.
This new Chase card offers a sign-up bonus worth 20,000 points. It can be earned after spending only $500 in the first three months. 20,000 points is a good amount to get you started on saving for travel.
You can transfer your points to a Chase Sapphire Card or an Chase Ink Business Preferred Card if you decide to open either of them later. This lets you take advantage of Chase’s transfer partners and travel portal. You can’t transfer your points directly from this card.
Discover It
Discover is the pioneer of no annual fee cards. Their original card was released in 1986 and was known for having no fees of any sort and earning cash back rewards. Discover’s current flagship card, the Discover It, earns 5% cash back on quarterly rotating categories.
For 2020, the categories are as follows:
- 1st Quarter: Grocery Stores, Walgreens, and CVS
- 2nd Quarter: Gas Stations, Uber, Lyft, and Wholesale Clubs
- 3rd Quarter: Restaurants and Pay Pal
- 4th Quarter: Amazon.com, Walmart.com and Target.com
Discover does not offer a fixed sign-up bonus for any of its cards. But they will match the cash back that you earned in your first year of card-membership.
US Bank Cash +
The US Bank Cash + is a nice card that earns 5% cash back within two quarterly categories. However, you get to select your categories from a preset list with this card. The categories are not predetermined like with Chase and Discover.
But that’s not all. You also earn 2% cash back within one quarterly category of your choice. All other purchases earn just 1% cash back.
There is a spend limit of $2,000 per quarter, which is slightly higher than competitors’ limits. That means you can earn up to $100 in cash back per quarter by maximizing the 5% category. There are no spend limits for the 2% category.
Furthermore, US Bank offers a sign-up bonus worth $150 with this card. You must spend $500 within the first three months to get the bonus. In other words, earning the sign-up bonus is like earning 30% cash back for the first $500 in expenses.
Flat Rate
Citi Double Cash
The Citi Double Cash earns 2% cash back on all purchases (1% upon purchase and 1% upon paying your bill in full). But what makes this card so awesome is the ability to transfer cash back into Citi TY points. The transfer ratio is 1 cent for 1 TY point. This powerful feature makes the Citi Double Cash one of the highest-earning personal credit cards in the industry.
However, the Citi Double Cash card does not have a sign-up bonus or any benefits. But it is a fantastic earner for those who want to avoid annual fees.
American Express Blue Business Plus
This is a favorite travel card for many points and miles enthusiasts for several reasons. It’s the only business card that lets you directly transfer points of any sort to travel partners without an annual fee. In this way, its like the Amex Everyday Card. However, the Blue Business Plus’ earning structure is better for many people and small businesses.
The Blue Business Plus earns 2x MR points on the first $50,000 in annual purchases. After that, it earns only one point on all purchases. This earning structure is a favorite among MR point collectors and its often paired with at least one Amex charge card.
Chase Freedom Unlimited
This card is a good choice if you’re interested in earning Chase UR points and you have varied spending. It’s also a great choice if you want a flat rate “workhorse” card that earns UR points. The Chase Freedom Unlimited earns 1.5x UR points on all purchases with no spend limits.
Like the Freedom, it offers a sign-up bonus worth 15,000 points. And that bonus can be earned after spending $500 in the first three months.
You can transfer your points to a Chase Sapphire Card or a Chase Ink Business Preferred if you decide to open either of them later. This lets you take advantage of Chase’s transfer partners and travel portal. You can’t transfer your points directly from this card.
Final Draw
While more value can be had with annual fee cards, there are many solid options that don’t have annual fees. The beauty of all these cards is that you can keep them forever and let your credit history and credit score grow.
Some of these cards are also complements to bigger travel cards with perks and annual fees. If you’re interested in perks, you should consider at least one card with an annual fee. This is especially true if you get a card with a first-year annual fee waiver. You will likely receive more value, perks, and points with a nice card combination.
You should think about your lifestyle, job, budget, and desire to travel. As with most credit and travel related situations, your mileage may vary.
Apply Today:
- Chase Ink Business Cash
- American Express Everyday
- Citi Rewards +
- Chase Freedom
- Discover It
- US Bank Cash +
- Citi Double Cash
- American Express Blue Business Plus
- Chase Freedom Unlimited
You forgot the Citi Dividend and US Bank Cash+ as 5% rotating cards.
Hi Jeremy,
This post has been updated to include the addition of the US Bank Cash +. The Citi Dividend has been discontinued and is not available to new applicants. Therefore, it was not included.
Best Regards,
Anthony