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Many people feel that paying an annual fee for a credit card makes no sense. Why should you pay to spend money?
I’ll confess that I used to be in this camp. However, I’ve learned that, when a credit card offers the right mix of benefits, rewards, and perks, it can absolutely be worth paying a fee — that’s because you’ll get way more value from the card than you’ll spend toward the fee. For example, I pay a total of $1,000 each year for two premium credit cards, but I get way more than that back.
However, there are still good reasons to go for a no-annual-fee card, especially because you don’t have to pay an annual fee to earn valuable rewards. Additionally, in the case of some Chase cards, adding a no-annual-fee card to your wallet can even supplement and boost the value of cards that do have an annual fee.
Here are the best no-annual-fee credit cards in 2020:
Keep in mind that we’re focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It’s important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.
Welcome offer: 20,000 points, worth $200 (after spending $1,000 in the first three months)
This card from Wells Fargo has one of the more attractive rewards programs you’ll find from a no-annual-fee card — at least, if you don’t want to dive into the complicated world of multiple rewards programs and complex redemptions.
The card earns 3x points on all travel, dining, and streaming services (and 1x point on everything else). If that sounds familiar, it’s because it’s almost the same as the popular Chase Sapphire Reserve.
There are some key differences between the cards. The Propel lets you redeem points for 1¢ each toward cash back, merchandise, travel, and more, while the Sapphire Reserve offers a range of more valuable redemption options — it’s easy to get at least 50% more value for Chase points. Plus, the Sapphire Reserve offers a number of premium perks that the Propel doesn’t, like airport lounge access and a $300 annual travel credit travel delay insurance.
Of course, the Sapphire Reserve also comes with a $550 annual fee, while the Wells Fargo Propel doesn’t have a fee. Between the new member offer, and the solid earning rate on popular spend categories, the Propel makes a decent option for those who don’t travel often, or who aren’t comfortable floating a large annual fee.
Welcome offer: $150 or 15,000 points (after spending $500 on purchases in the first three months)
The Chase Freedom Unlimited is one of the best available options for a no-annual-fee card — especially if there’s a chance that you’ll want to earn more valuable credit card rewards with a premium card later on.
That’s because while Chase markets the card as “cash back,” it actually earns Ultimate Rewards points that you can redeem for cash (1 point = 1 cent).
If you decide that you want maximize the value of those points by purchasing travel with a bonus through Chase, or transfer them to frequent flyer partners, you can open a card like the Chase Sapphire Preferred Card or the Sapphire Reserve, and pool your points from the two cards. The Freedom Unlimited earns 1.5% cash back (or 1.5 points per dollar spent) with an introductory offer of 3% (or 3 points per dollar) for the first $20,000 spent in your first year, so paired with a Sapphire Reserve, it’s a great card to use for purchases that aren’t made on travel expenses or dining.
The Chase Freedom Unlimited is a fantastic all-around card. However, to get the most value when it’s time to spend your points, you need the Sapphire Reserve or Preferred card, too, so you can pool your points. Otherwise, points are only worth 1¢ each no matter how you use them, and they can’t be transferred to airline or hotel partners.
Welcome offer: $150 statement credit (after spending $1,000 in the first three months)
The Blue Cash Everyday is a cash-back card, earning 3% cash back at US supermarkets on up to $6,000 each year — and 1% after that — 2% back at US gas stations and select department stores, and 1% cash back on everything else.
There’s also a “Preferred” version of the Blue Cash Everyday — the Blue Cash Preferred® Card from American Express earns a bigger 6% back on the first $6,000 spent at US supermarkets (and 1% after), 6% back on select US streaming services, 3% back at US gas stations and on transit including taxis, rideshares, parking, and tolls, and 1% cash back on everything else. The higher earning rate on the Preferred makes it worth paying the annual fee — however, the Blue Cash Everyday is still a great option if you’re opposed to that.
4. Uber Credit Card
Welcome offer: $100 Uber Cash (after spending $500 in the first 90 days)
The Uber card has offered surprisingly good value since it launched in 2017, with no annual fee as well as no foreign transaction fees. And it just received an update that makes it even more valuable if you’re a frequent Uber customer.
Now, the card earns 5% cash back on Uber purchases — up from the previous rate of 2% back. So the Uber credit card is hard beat in terms of earning cash back on your Uber rides (as well as Uber Eats orders and JUMP bike and scooter rides). The card no longer earns 4% back at restaurants; instead, it earns 3% back — at restaurants, bars, hotels, vacation rentals, and airfare. But that’s still pretty solid.
The Uber credit card earns you Uber Cash that you can redeem toward Uber purchases. So don’t get this card if you don’t think you’ll ever spend money with Uber. It also offers a cell phone protection benefit.
Welcome offer: $150 cash back or 15,000 points (after spending $500 in the first three months)
The Chase Freedom works virtually the same way as the Freedom Unlimited, earning cash back in the form of Chase Ultimate Rewards points that you can either combine with another card, or redeem for cash or merchandise.
The key difference is how it earns those rewards. Unlike the Freedom Unlimited — which earns 1.5% cash back (or 1.5 points per dollar spent), the regular Freedom earns 5% (or 5x) in rotating categories each quarter on up to $1,500 spent in that category. For example, Q1 of this year was any payments made through a mobile wallet like Apple Pay, while the current quarter includes purchases at gas stations, select streaming services, and internet, cable, and phone services.
Which Freedom-branded card is more rewarding for you depends on how you spend your money. Personally, I use both, but if I had to choose one, I’d stick with the Freedom Unlimited — the consistent earning rate above 1% would make up for the lack of quarterly bonuses. To each his or her own, though!
Welcome offer: $500 (or 50,000 Ultimate Rewards points) after spending $3,000 in the first three months
The Ink Cash is another solid Chase entry, although this one is a business card — however, anyone with just about any kind of business can qualify, whether you have a brick-and-mortar space with employees, or you’re a freelancer, or even someone with a small side gig.
Just like with the two Freedom cards, you can pool the “cash” you earn with points from a points-earning card, effectively converting your cash into (potentially) more valuable points. Alternatively, you can reap the rewards in the form of cash instead.
The Ink Cash earns 5% cash back (or 5x points) on the first $25,000 in combined purchases at office supply stores and on internet, cable, and phone services each card holder year. It earns 2% back (or 2x points) on the first $25,000 in purchases at gas stations and restaurants each year, and 1% (or 1x point) on everything else with no cap.
Welcome offer: None
All in all, the Citi Double Cash is the simplest card on this list. It earns 2% cash back — 1% when you make a charge, and 1% when you pay it. Since, if you’re looking for credit card rewards, you should be paying your balance off in full each month, you can just look at the full 2%.
There’s one downside, though: the card doesn’t have a sign-up bonus. That’s significant, because the money you earn from a sign-up bonus can equal an entire year’s worth of regular spending. Just look at the Wells Fargo Propel, above, which offers $300 worth of points. To get that much, you’d have to spend $15,000 on the Citi Double Cash.
While I would personally stick with a card that offered a generous sign-up bonus, there’s no questioning the appeal of the Double Cash. With no categories to worry about, you’re guaranteed among the highest consistent return rates of any cash back card — 2% across the board is nothing to sneeze at.
8. Amex EveryDay Credit Card from American Express
Welcome offer: 10,000 points (after spending $1,000 in the first three months)
American Express Membership Rewards is Amex’s in-house rewards program, and the Amex EveryDay is the best no-fee card that earns them. These points can be redeemed for travel, merchandise, or more. However, the best option is to transfer them to a frequent flyer partner.
The EveryDay earns 2x points at US supermarkets (on up to $6,000 of purchases per year, then 1x after that) and at AmexTravel.com, and 1x on everything else. It also offers a 20% bonus on points earned in a billing period when you make 20 or more purchases during that period.
Like most Amex cards, features a few travel and purchase protections, as well as access to the Amex Offers program.
While most people will be better off with a version of the card that has an annual fee, the Amex EveryDay® Preferred Credit Card from American Express, the regular EveryDay is still a strong option — especially since there’s no annual fee.
9. A no-annual-fee airline credit card
Welcome offer: Varies
You may be sensing a theme here, but most airline credit cards worth having have an annual fee — although many of them will waive it for the first year. Those cards tend to come with useful benefits for people who fly with the airline, like priority boarding or free checked bags. You can learn more about the best overall airline credit cards here.
However, if you’re interested in earning frequent flyer miles with a particular airline through your spending, but don’t care about those perks and want to avoid the fee, you have a couple of options.
If you’re a Delta flyer, you can go for the Blue SkyMiles card from Amex, which offers 2 Delta SkyMiles on every dollar spent with Delta and at US restaurants, and 1 mile per dollar on everything else. It also gets you a 20% discount — in the form of a statement credit — on Delta in-flight purchases like food or drinks. It offers 10,000 SkyMiles when you spend $500 on purchases in the first three months.
American loyalists have a new option, the recently-released AAdvantage MileUp card. This card offers 2x AAdvantage miles on every dollar spent at grocery stores and with American Airlines, and 1x mile on everything else. It also offers 10,000 AAdvantage miles and a $50 statement credit after spending $500 in the first three months.
United’s no-annual-fee card doesn’t earn miles, but instead offers cash back, called “TravelBank” cash, that can only be redeemed towards flights. You’ll earn 2% TravelBank cash for every dollar spent with United, and 1.5% on other purchases. You’ll also get 25% back on in-flight food and drink purchases. The card offers a sign-up bonus of $150 in TravelBank cash after you spend $1,000 in the first three months.