The 4 Best No Annual Fee Personal Credit Cards

Filed Under: American Express, Chase
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Update: This offer for the Amex EveryDay® Credit Card has expired. Learn more about the current offers here.

Earlier I made a post about what I consider to be the two best no annual fee business credit cards. In the comments section of that post, reader Joe asked if I could do a similar post about the best no annual fee personal credit cards. So that’s what this post is about.

As I explained in the last post, while it can make a lot of sense to get credit cards with annual fees, it’s also great to hold onto some no annual fee cards long term. That’s because one aspect of your credit score is your average age of accounts, and that’s helped by having no annual fee cards that don’t cost you anything.

With that in mind, here are four of the best no annual fee personal credit cards out there, in no particular order:

1% cash back + 1% cash back

While you can get disproportionate value from miles & points, it can take a lot of effort to actually figure out points systems. They’re intentionally complex, which is why most people redeem then sub-optimally. So for a majority of consumers I think using a simple cash back card is the best option. Typically you want to aim for a return of two cents on every dollar spent for a no annual fee card.

One option is the Citi® Double Cash Card, which offers 1% cash back when you make a purchase, and 1% cash back when you pay your bill. Getting two cents back on each dollar spent without an annual fee is fantastic, and is something that many should consider, in my opinion.

More than one point per dollar, plus a great bonus category

The Amex EveryDay® Credit Card from American Express has two great bonuses. Specifically, it offers:

  • 2x points at US supermarkets, on up to $6,000 per year in purchases
  • A 20% points bonus when you use your card 20 or more times on purchase in a billing cycle

So assuming you make at least 20 purchases per billing cycle, this is a no annual fee card that offers 2.4x Membership Rewards points on the first $6,000 spent at grocery stores each year, plus 1.2x points on all other purchases. This is also the only no annual fee personal card that I know of that offers Membership Rewards points that can be transferred to hotel and airline partners.

That’s a pretty awesome return.

Up to 5x points in rotating quarterly categories

The no annual fee Chase Freedom offers 5x points in rotating quarterly categories, for up to $1,500 of spend per quarter. For example, this quarter you can earn up to 5x points on restaurants and movie theaters.

On the surface this is a cashback card, meaning that each point earned on the Chase Freedom can be redeemed for one cent cash back. However, if you have this card in addition to one of the cards that accrues Ultimate Rewards points, you can transfer these points to Ultimate Rewards.

"Premium" Ultimate Rewards cards:

So 5% cash back converts into 5x Ultimate Rewards points per dollar with one of the above cards.

Up to a return of ~2.55% on everyday spend

There are two personal no annual fee Chase cards that can help boost your balance of Ultimate Rewards points. In addition to the Chase Freedom, there’s also the Chase Freedom Unlimited®, which offers a flat 1.5x points per dollar spent.

On the surface those points can be redeemed for one cent cash back each, meaning it’s potentially a 1.5% cash back card, which isn’t as good as the Citi® Double Cash Card. However, if you have this card in addition to one of the cards that accrues Ultimate Rewards points, you can transfer these points.

Since I value Ultimate Rewards points at ~1.7 cents each, that’s like a return of ~2.55%, in my book.

Which of these cards do I have, and why?

While I think the Citi® Double Cash Card is a great cash back card, personally I avoid cash back cards given that I’m good at redeeming points. A vast majority of people don’t spend the time to learn how to use these currencies, and therefore don’t get great value, which is why I think a cash back card is awesome. But in my case I’d rather use the Chase Freedom Unlimited® for everyday spend, since I value 1.5 Ultimate Rewards points at more than two cents.

I also don’t have The Amex EveryDay® Credit Card from American Express, because I have the more premium version of the card — The Amex EveryDay® Preferred Credit Card — instead. Personally I find it worthwhile for the better return it offers on spend, but for someone looking for a no annual fee card, I think the EveryDay is excellent.

I do have both the Chase Freedom and Chase Freedom Unlimited®, as I find them to be excellent complements to the cards that accrue Ultimate Rewards points. I probably wouldn’t consider the cards worthwhile if I didn’t have them in conjunction with an Ultimate Rewards card, but with how I use them, I get tons of value out of them.

What’s your favorite personal no annual fee card? Which of the above do you have?

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  1. @Lucky You probably don’t get paid for referrals to the Citi Costco card, but it’s actually the best no annual fee cash back card out there. 4% on gas, 3% on dining and travel, 2% on Costco purchases and 1% on everything else. It has some other decent benefits, like rental car collision coverage.

    Of course, you have to have a Costco membership, which does have an annual fee. But, if you are an Executive Member for $120/year, you get 2% cash back on all purchases at Costco. And you can stack that with the Citi Costco card.

    I spend about $500/month at Costco, plus $100/month on gas, plus probably $5K annually goes on the card for leisure travel/dining (as opposed to business travel, which I put on Amex/CSR). That amounts to about $500 cash back between the card and the membership for roughly $12,000 annual spend. I am getting about 4% return on that spend. Pretty dang good.

  2. Discover’s It Card is essentially the same as Chase Freedom offering 5x points in rotating quarterly categories, for up to $1,500 of spend per quarter. The biggest difference is that it offers 2x the points for the first year so the normal 1x on non-bonus spend is increased to 2x and the 5x bonus spend goes to 10x. The other thing to like about this card (other than no annual fee) is that you can redeem your points for statement credits, cash back, or gift cards (offering increased value). In the travel section of GC’s you can find excellent value of redeeming $20 cashback for a $40 GC’s for rental car companies: Enterprise, Alamo, and National (doubles you return on spend), cruise lines including Carnival, Princess, Celebrity, Norwegian, Holland America, and Royal Caribbean all double GC value’s.

  3. What is the current number of credit and charge cards that AMEX generally allows one person to have?

  4. @MK 4 of each for Amex cards. Although I’ve heard of people getting approved for a 5th credit card.

  5. Costco is great but inaccessible to over a 1/3rd of the USA and pointless for the vast majority of those living in urban cities. I used it when I lived in Lewisville but I never shopped there regularly. Bulk items like dish detergent and similar once a month. Its a good card to have but its not something to get too excited about.

    Also, Costco does not have the lowest gas prices, pretty much anywhere. Close but not the lowest. I spent zero dollars on gas or leisure on that card because the return is worse than the yield on other cards. Good card but nothing special.

  6. @Corey Sacken after adding cash back on gas prices for a total of 6% cash back between the card and the exec membership, Costco Gas is going to be the best deal in town without having to drive far out of my way. 3% return on leisure travel is good for no annual fee cash back card. Very good. I have have a family and we do 90% of our grocery shopping at Costco, so I’m getting 4% cash back on my grocery shopping (2% for card, 2% for exec membership). As I gave details on, above, I’m getting about 4% cash back across the board. I have a hard time finding a card with an annual fee between $0 and $100 that can achieve 4% cash back.

  7. Second the DiscoverIt card. 5% return on select categories is a nice complement to anyone’s credit card strategy, when you’d otherwise be using a general-spend card for a couple cents/dollar value.

    I’m intrigued by the Fidelity 2% card too. I think I’d rather use the Chase Freedom Unlimited to transfer the 1.5 points/dollar to my Sapphire Reserve, but if/when that transfer capability is devalued, going for a fixed 2% is easy. Stick the money in a Roth IRA, and it could payoff in the long run.

  8. Fidelity 2% Visa never gets any love. But I understand. This is really “The 4 Best No Annual Fee Personal Credit Cards That Pay Out Referrals.”

  9. @Eric… While the citi costco is nice. It isn’t even the best card at costco for earning cashback. The lack of referral bonuses is often displayed in the BOA duo of the Cash Rewards and Travel Rewards. With the caveat yo uneed $100,000 in Merrill Edge IRA or taxable Brokerage accounts, the BOA cash Rewards Gives you a 75% bonus on 3%gas/2%grocery WAREHOUSE club/1% everywhere else. You are limited to $2500 total spend per quarter in the bonus categories of Gas/Grocery/WAREHOUSE club, but I have both a Visa and Mastercard Cash reward and thus a $5,000 spend per quarter between the two cards (I save the VISA for Costco as they do not take MC currently in store). That gives a return on straight cash back of 3*1.75% = 5.25% gas, 2*1.75% = 3.5% grocery and warehouse club, and 1.75% everywhere else. Of course the BOA travel rewards also gives the 75% bonus and it is 1.5%*1.75= 2.625% back on everything, so I use that instead of the cash rewards on nonbonus categories. And yes the gives me back 3.5% plus 2% executive membership bonus or 5.5% cash back on costco. On $6,000/year at costco that gets you $330 cashback per year (combines executive and BOA cashback). Through in 5.25% back on all gas and some grocery spend I think that is more lucrative for the costco shopper.

  10. @Rabbm Yep, I have seen that …. however, my large cash investments are with Fidelity and it’s not worth moving to Merrill/BofA …. without that sort of cash on deposit at BofA, there is no 75% bonus and so the rewards aren’t as lucrative as the Citi Costco card + Exec membership.

    Also, not everyone has the ability to do this. But anyone (pretty much) can do the Citi Costco card + Exec Membership.

  11. @Peteynice I must agree this is definitely a referral driven post. While I understand the need for referrals, they could have at least pretended to be a bit more objective.

  12. Eric – Good discussion of Citi Costco – do you know if rental car collision coverage is primary, like certain Chase products? I have been looking for a no/low annual fee card that has primary rental car collision coverage, but am above 5/24 so cannot apply for Chase Sapphire Preferred/Reserve

  13. Come on Ben; if you are going to list, do both the cards you get referrals and those you do not
    Flat 2% – Fidelity Visa and Citi Double cash MasterCard
    Chase Freedom and Discover
    Bofa Rewards and even Amtrak cards
    Amex Everyday and others like Costco

  14. Lucky while I realize you get referrals there are other great non CITI non CHASE non AX cards out there such as the Discover IT and the Costco VISA along with the PFCU Plat Rewards and BLISPAY which is a 2% back on everything plus 6mo interest free on all purchases over $250. Please think outside of the box!!

  15. I’ve said it before, but the USAA Limitless Cashback card is likely the best no annual fee cash back card for everyday spend — 2.5% back on everything so long as you have direct deposit to a USAA account. The catch is that it’s limited to those who qualify for USAA membership.

    Of course, my guess is that USAA also does not pay Ben a referral.

  16. There are two credit unions that offer Visa cards, no annual fee, with a nice 5% cash back category.
    Fort Knox Federal Credit Union – 5% cash back on gas

    VantageWest Credit Union – 5% cash back on wholesale clubs (or other categories).

    I was approved for both although I don’t live in the same state as either credit union.

  17. @H I never checked, but I believe that the Costco card collision coverage is secondary, not primary. It’s a standard Visa, not a Visa Infinite like the Chase Sapphire cards. Regardless, if you are a Costco user, then the Citi Costco card is a great cash back option. Too bad Lucky won’t push it without referral fees.

    @Storm I am sure Lucky gets no referral fees from USAA … and, of course, there is a fee for USAA … you have to serve in the military (or be a family member of someone in the military).

  18. I’m a Brit and an avid reader of your blog. I totally understand why the CC info is US orientated but wondered if you have any partners/associates who could offer similar information for those of us across the pond.

  19. I did the math for my spending and the Fidelity Visa 2% was the best, plus it goes into your account monthly rather than siting in your account doing nothing until you manually withdraw it….. Side note: My Fidelity Visa 2% reward goes into an account which holds SPY (S&P 500) ETF’s which are up roughly 16% this ytd! Compare that to ANY no annual fee personal card and it blows the others out of the water! Remember: MAXIMIZE, MAXIMIZE!…… 🙂

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