Compare No Annual Fee Credit Cards
Fees can really add up on your credit card—especially the annual fee. Do you really need to have a card with an annual fee? There’s plenty of deals on the market for no annual fee cards. Some of them even have rewards programs attached, although generally speaking the low or $0 fee cards often have less features included. But what exactly is a no fee credit credit card?
Although of course, the annual fee isn’t the only fee associated with having a credit card. There’s interest fees and possible international transaction fees when using your credit card. If you don’t feel you’re getting value from the fees you’re paying, then considering a no annual fee card might be an option to consider.
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What is a no annual fee credit card?
Like the name suggests, a no annual fee credit card is one that doesn’t charge you a yearly fee. In some cases, a credit card might have an introductory offer where the annual fee is waived. However, a truly no annual fee card will have $0 in annual fees for the life of the card.
InfoChoice currently has more than 23 credit cards that don’t charge an annual fee to compare.
What is an annual fee for?
The annual fee you pay on your credit card is usually put towards things like account maintenance or to support rewards features on your card like a Qantas frequent flyer program. Fee free credit cards often don’t have the same level of rewards.
What are the benefits of a zero annual fee credit card?
It’s economical. A no annual fee credit card of course means you don’t have to pay out every year, a fee which could be anywhere from a low $30 up to a whopping $700 annually.
If you’re looking for a simple card, without the frills or rewards programs a zero annual fee credit card can be a better option for you. Additionally if you know you’re not a particularly big spender then this is an option that might work for you.
A zero annual fee card is a good starter card, especially for students, recent graduates or people starting out with their first credit card. It’s also ideal for emergencies such as a car repair or unexpected medical bills.
Another benefit can be the introductory offers with credit cards that might offer to waive annual fees for a set period of time. This can save you some initial outlays up front.
Some of the other benefits may include a balance transfer which if used properly can assist with consolidating debt.
If you’re someone who doesn’t use your card very regularly, and only for peace of mind and emergency purchases, a fee free credit card can be a great fit. Generally speaking, if you spend $1,000 per month or less a no annual fee card would suit you.
Are there any risks in having a no annual fee credit card?
There can also be a downside to cards with an introductory deal. You need to be sure you will still be benefiting once the promotional or introductory period wears off. It’s important to check all the terms and conditions to be sure that an annual fee won’t wipe out any potential savings you made in the introductory offer.
Depending on your spending needs, there is generally less features with a no annual fee credit card. When you pay an annual fee it typically goes towards some of the perks for credit cards, such as rewards programs or travel insurance. There are some frequent flyer cards that waive annual fees, but it’s typical to pay a fee to get those perks.
A nil annual fee sounds like a great saving, but buyer beware of any other fees involved to avoid getting tung. Do your research and check the minimal interest free days, the interest rate and any other fees associated with the credit card. You don’t want to be saving your annual fee only to cop a higher interest rate.
Nil annual fee cards generally have a higher interest rate than say a low interest credit card, which does charge an annual fee but offers a lower interest rate. If you are unable to pay off your credit card in full each month, the interest on carrying a balance may end up costing you more than the money saved on the annual fee.
If you’re a big spender of more than $1,500 than a moderate annual fee may suit you better. Those who consistently spend more than $2,500 per month on their credit card would justify splurging on a premium credit card—assuming the balance is always repaid in full each month.
What are the different types of no annual fee credit cards?
Although some no annual fee credit cards are on the simpler or basic side, there are some that boast a range of additional features.
No annual fee balance transfer credit cards
These cards can assist with repaying existing debt faster with a balance transfer special interest rate of 0% for a period of time, often up to two years. However there may be other fees such as a one-off balance transfer fee, typically calculated as a percentage of the balance being moved over to the new card. This could be anywhere from 1.5-2%.
No annual fee rewards credit cards
These cards help you to earn points you can redeem on vouchers and merchandise. Without having to pay an annual fee, these cards may look appealing to some consumers. However it’s important to note that the rewards programs have less frills than most credit cards with an annual fee.
No annual fee frequent flyer credit cards
Get rewarded for your everyday spending by earning frequent flyer points. Most no annual fee programs offer between 0.5-0.75 Qantas frequent flyer point for every $1 spent.
No annual fee travel cards with 0% foreign fees
This particular card type is ideal for frequent travellers as you pay no foreign transaction fees when shopping online or overseas.
Should I get a no annual fee credit card?
To answer this question you’ll need to really think about what you use your credit card for–and how often you use it. If you’re looking for a credit card for those emergency situations, or peace of mind, then a no annual fee credit card might be the way to go.
You should also carefully check the terms and conditions when it comes to bonus sign-up points on rewards cards. If you have held a credit card with a provider for the past year or so you might be excluded from any bonus sign-up points. If you’re switching purely for that bonus you might come away disappointed.
It’s also important to keep track of your card anniversary. Especially if you are on an introductory offer that merely waives the annual fee temporarily, pay close attention to avoid getting stung.
Some credit cards will also waive the annual fee if you meet a particular spending target. Even with a platinum card you can often avoid paying the annual fee if you spend a particular amount in a year. These amounts are not usually too difficult to reach—for example $6,000 per annum.
How do I choose the right fee free credit card for my circumstance?
There are so many credit cards with $0 annual fees, visa and mastercard. On InfoChoice we have a huge variety to choose from, and it’s important to note there is no one option that will suit everyone.
Ask yourself some key questions to help you choose the right card for your personal circumstance. First consider what you’ll be using the card for. Is it for an overseas holiday? Consolidating debt? Emergency spending? How often will you be using it? How much do you plan to spend on your credit card each month?
All of these questions will help you narrow down your choices for the right credit card for your situation.
Next use our InfoChoice comparison tables to help scrutinise and decide on what will be best for your situation. One of the biggest charges to consider is the interest rate. The purchase rate can vary greatly from card to card. If your biggest goal is to keep your costs down, then comparing the interest rate will be incredibly important.
Then compare all other fees and potential costs of keeping your credit card for a period of time. Consider your own spending patterns and look for a card that will suit your needs.
How does an introductory offer work for a no annual fee credit card?
Whilst most no annual fee cards are fee free for the life of the card, some have an introductory offer where the annual fee is waived for the first year. Some no annual fee cards offer deals on things like balance transfers, and occasionally, some may provide purchase offers.
Opting for a balance transfer offer on a no annual fee card could be very beneficial in consolidating debt whilst helping you to save on annual fees. Unlike rewards cards that encourage spending to gain reward, a no annual fee cards help you to focus on clearing your balance. However, the interest rate often increases after the 0 interest period ends, so some planning is needed to be able to pay off the balance during the interest free period.
Some providers may continue to waive the annual fee if you keep the card active for it’s lifespan.
How do I apply for a credit card?
If you’re 18, with a good credit history and meet a card’s eligibility requirements, applying for a credit card is relatively simple. You can apply online, over the phone or in branch. Completing your application can be as quick as 5 minutes.
In most cases, you will need to be an Australian citizen or permanent resident. Temporary residents will need to hold a valid visa to apply.
Before applying you’ll need to gather up your paperwork. This will include your personal details like full name, date of birth, proof of citizenship or residency, postal address, email address and phone number. You will also need a valid ID like a passport, medicare card or drivers licence.
Evidence of your employment such as a payslip to verify your income, and any other income like Centrelink, shares, and a list of regular expenses. You will most likely need a recent bill or bank statement as well.
What other fees come with a credit card?
There are a number of other fees that may be included with a credit card. Just because it’s a $0 annual fee doesn’t mean it’s a fee free credit card.
Additional cardholder fees: a fee charged on some cards to have another cardholder linked to your account.
Admin fee: a monthly fee charged to keep your account running.
Balance transfer fee: the fee charged to move your existing balance to a new credit card.
Cash advance interest: immediate fee charged on withdrawing money from an ATM or drawing a cheque on credit.
Foreign exchange fee: an additional fee charged when purchasing in another currency on top of the normal exchange rate. This also applies when online shopping in an international currency.
Late payment fee: forget to make your minimum repayment on time? You’ll likely be stung with a fee for failing to make it on time.
Overseas charges: that holiday shopping spree can really add up when charges a fee to cover the extra costs of processing overseas transactions.
Paper statement fee: a small fee charged for sending out your statement in the mail.
Payment dishonour fee: a fee charged if your payment does not go through or you cannot afford a payment
Payment handling fee: this is a fee(s) charged for making transactions. This fee can vary depending on if your transaction is made in person or online.
Replacement card fees: lost your card? Some providers might charge you a fee to send out a new card.
It’s important to be across all the fees associated with your credit card. The Product Disclosure Statement provided will outline these fees for you, and it’s worth spending the time sifting through it before making a decision.
$0 reward program credit cards
A reward program credit card incentivises you to spend—the more you spend the more rewards you can earn. You can then redeem your rewards for things like vouchers, gift cards, merchandise and more.
For example the Coles No Annual Fee Mastercard gives users access to bonus frequent flyer points. Credit card holders collect 1 point for every $2 on eligible spend. That’s on top of usual flybuys points from other partners. 2000 flybuys will give a user $10 voucher redeemed at a number of major retail outlets.
$0 annual fee frequent flyer credit cards
Most frequent flyer credit cards come with an annual fee that goes towards the program. However, there are a select few that will waive this cost. Depending on the card, you could get no annual fee for the first year or even for the life of the card. This could save you between $30 to $700 in annual fees.
How do they work?
These credit cards work by letting customers earn frequent flyer points on their everyday spending. The points can be redeemed for various rewards including flights, hotels, gift cards and retail items.
First year $0 annual fee
Some frequent flyer credit cards will waive the annual fee in the first year as part of an introductory offer. After the first 12 months, on your card anniversary you’ll be charged a standard annual fee for the account.
This means you have the time to test out the card and enjoy some of the perks without forking out for an annual fee. If you decide some of the perks are worth it (like bonus point offers or access to the airport lounges) you can then keep it and pay the fee. If not, you can cancel the card before you reach your card anniversary and avoid being charged any annual fee.
No annual fee for life
A limited selection of frequent flyer credit cards offer no annual fee for life, including the Qantas American Express Discovery where you can earn 0.75 Qantas point for every $1 spend on Card purchases. You can even pay no annual fee for up to four supplementary cards so you can earn even more Qantas points.
The catch with a no annual fee is that you may not have as many extra features included, such as complimentary travel insurance. It’s also a little less common for no annual fee frequent flyer cards to have huge introductory bonus point offers. If you do get one of these cards and pay the entire balance off each month, it does give you a way to earn frequent flyer points without paying any account fees.
How long does it take to earn enough points for a reward?
This is largely dependent on the amount of points you earn per $1 spent, your overall spending and whether the card includes an introductory bonus point offer.
As an example, say you had a card that earned 0.75 Qantas Points per $1 and spent an average of $2,000 per month. Over a year, you would earn 18,000 Qantas Points, which is almost enough for two $50 digital Woolworths Group gift cards (9,500 points) or a one-way economy flight between Melbourne and Brisbane (12,000 points).
You could also save your points up for higher-value rewards. If your card came with a nice bonus point offer, meeting the spend requirement would help fast-track your frequent flyer goals.
If you don’t always pay off the full balance on your credit card each month, you might want to consider a low rate credit card.
While you will still need to make the minimum monthly repayment, a low rate credit card can help you keep your debt under control by reducing the amount of interest you are charged on your remaining balance. They may not offer fancy rewards or perks, but they are a good option for staying on top of your finances.
Here you can compare different low rate credit cards from various banks and credit unions to find the best product for your needs.
No Annual Fee Credit cards FAQs
What types of ‘no annual fee’ credit cards exist?
Generally speaking there are two:
No annual fees for the first year: often part of an introductory offer it’s worth considering whether you are comfortable and benefit from paying the annual fee after the first 12 months.
No annual fees for life: these cards change no annual fee for life, meaning you won’t have to switch banks each year to avoid paying an annual fee. Typically these have less benefits and rewards than other cards.
Does my credit score affect the annual fee on a credit card?
No. Your credit score may determine whether an application is approved, and possibly have an impact on the purchase rate offered but it unlikely to have any impact on the annual fee charged.
Can you get an annual fee waived?
Possibly. Once you’ve had your credit card for a few years and used it consistently, it’s worthwhile picking up the phone to call your credit card provider and request a waiver of your annual fee. You have nothing to lose. The person you speak to may have some discretion to approve a request, especially to keep your business with their company and if you have spent enough with them to justify waiving the fee. Even if you are not successful, you might be given an upgrade to a card with more reward points and benefits for the same annual fee. It’s always worth asking.
What is the average for a credit card annual fee?
The average fee is around $100 for a moderate credit card. This should include a reward or Qantas frequent flyer points and perhaps even a few other benefits like travel insurance. Fees can vary and it’s worth comparing them against the benefits offered.
Is there a rewards program on a card with no annual fee?
Yes, although not as common there are some cards with no annual fee with a rewards program. However, if you don’t pay your balance in full each month the value of the rewards earned can be completely negated by the interest charged.
Is there anything to avoid with a no annual fee card?
No annual fee cards tend to charge more interest, so one of the biggest mistakes can be to carry a balance. To avoid interest charges, pay off the balance in full each month to make the most of the no annual fee savings.
Is a personal loan better than a no annual fee credit card?
Credit cards can come with various fees including but not limited to late payments, foreign exchange and transaction fees. Personal loans could have fees for things like the application, loan service, late payments, or exit fees.
They’re two different products used for different purposes, so considering your goal is important. A no annual fee credit card can be good for ongoing, small scale spending, whereas a personal loan is good for larger, one-off spend.
How do I apply for a no annual fee credit card?
Once you’ve carefully reviewed our InfoChoice comparison table you can click to go directly through to the credit card providers site to apply online. Most can give approval in just a few minutes. Of course you’ll need to have the right paperwork ready for your application like ID, payslip, current bank statements and possibly a copy of your credit report.
Can my application for a credit card get rejected?
Yes, credit card providers can and do decline applications for a number of reasons. It’s important to ensure all of your information such as a drivers licence number is correct to avoid rejection. Other reasons like minimum income, age limits, credit history and citizenship status can all factor into your application’s outcome. Applying for multiple cards over a short period of time can often be a red flag for banks so think carefully before applying.
Can I do a balance transfer to a no annual fee credit card?
Yes, quite a few no annual fee cards have an introductory zero interest balance transfer option. However, a balance transfer does mean you lost your interest-free days on purchases until it’s fully repaid. If you are planning to use the card for purchases you might end up paying more in interest than what you save on an annual fee.
I’m a pensioner, can I get a credit card?
Yes, look for credit cards with minimum annual income requirements that you are able to meet. If fees are a concern, a no annual fee credit card might be an option.