Reaping Rewards on Low-to-No Annual Fee Credit Cards

When consumers are considering their next credit card, one thing that usually sticks out like a sore thumb is the annual fee. They may ask themselves, why do I have to pay this? Or, what’s the difference between a card with an annual fee and a card without one? 

In most cases, an annual fee affords its users certain perks and benefits. The fee for the first year is sometimes waived by the issuer, but the user will have to pay the fee each recurring year to continue using the card. While (link: creditcards.usnews.com/articles/fee-survey text: 70% of all credit cards) don’t charge an annual fee, for the ones that do, the average annual fee is $110, which can be a steep price for some consumers. 

For consumers who don’t want to pay on the high end of the spectrum for an annual fee — or don’t want to pay a fee at all — there are credit card options out there that offer special benefits. The specific rewards depend on the card, but whether you want to pay zero dollars for an annual fee or a lower amount (say, $35) compared to the national average, here are some potential perks you may find. 

Everyone loves getting cash back on a card when they make a purchase. The money can typically be refunded to the cardholder in two ways: applied to the credit card balance or deposited into a transferrable bank account. 

Cash back rewards can be unique in how the rate of your refund (i.e., percentage of your purchase) varies depending on where you spend. For example, a card can offer 3% cash back on travel & entertainment, 2% cash back on restaurants, and 1% cash back on all other purchases. No matter where you’re spending, cash back is a great reward option available on many low-to-no annual fee cards. 

What’s better than no annual fee? How about zero interest? Some cards with low-to-no annual fee offer introductory APR promotions, which allow users to pay 0% interest on purchases and (link: /learn/about-creditcards/what-are-the-pros-and-cons-of-a-balance-transfer-card text: balance transfers) for specific time periods, after the account is opened. The periods typically range from six to 18 months, and allow new users to temporarily carry a balance for a big purchase or transfer over debt from a high-interest card. 

Just remember, nothing lasts forever, and the same goes for an introductory APR. It’s important to pay your balance in full before the promotional period is over, as any remaining balance is subject to interest charges and other fees. 

There are a number of other unique rewards available on low-to-no annual fee cards. For example, some issuers offer a complimentary year of priority membership. Other cards provide a statement credit (free money applied to your account balance) after you spend a certain amount on purchases over a specific period. Other cards offer bonuses on rewards points, which can be applied to certain issuer-approved purchases, like air travel. 

Many people think a high annual-fee card is the only way to unlock credit card awards, but that is simply not the case. For consumers interested in a new card that doesn’t totally skimp on the perks and benefits, there are a number of options available. Try Fiona to get matched with credit card offers, featuring rewards that match your spending habits.