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Update: Some offers mentioned below are no longer available. View the current offers here – Citi Hilton HHonors Visa Signature Card
Everyone wants to earn valuable travel rewards from the credit cards, but not everybody is willing to pay a high annual fee. Today, TPG Senior Points & Miles Contributor Jason Steele takes a look at some of the best values in travel rewards credit cards with low (or no) annual fees.
All travel enthusiasts eventually realize that award travel is never truly free. In addition to the taxes, fees and fuel surcharges paid for award tickets, the annual fees we pay to credit card issuers can be a significant expense. When you’re a big spender, these annual fees don’t increase your cost per point very much, but for everyone else, having multiple credit card accounts with high annual fees can drastically increase your award travel expenses.
Ways to Reduce Your Annual Fees
Thankfully, there are still some great credit cards that have low annual fees, and you can also take advantage of offers that waive the annual fee for the first year. While I don’t always keep a great card after the first year, I like to think of these fee waivers as a way to at least cut my costs in half over two years, by which time the terms may change, my needs may change or I might find a better offer from another card.
Another strategy to minimize your annual fees is for families and couples to share the benefits of their credit cards. For example, many airline credit cards offer a free checked bag or even lounge membership for the primary cardholder and others traveling on the same reservation, so there’s no need for a couple to hold two accounts if they travel together often. For more information, read my post, Coordinating Credit Card Strategies for Couples.
Finally, you can always try contacting your card issuer and asking to have the annual fee waived. While there’s no guarantee that you’ll be successful, it doesn’t hurt to ask. In many cases, cardholders are denied the waiver, but offered additional reward points or miles that can be worth nearly as much as the annual fee.
1. Chase Sapphire Preferred ($95; waived the first year)
This card is a favorite among award-travel enthusiasts, and it features a reasonable $95 annual fee that’s waived the first year, and no foreign transaction fees. The current sign-up bonus is 50,000 Ultimate Rewards points after new cardholders spend $4,000 within the first three months of account opening, and another 5,000 points after adding an authorized user. Together, these 55,000 points are worth $1,155 based on TPG’s most recent valuations.
Plus, you earn double points on all travel and dining expenses. Points are always worth 1.25 cents each for travel reservations booked through the Chase Ultimate Rewards travel portal, and points can be transferred to 10 different airline and hotel partners, including Hyatt, Marriott, Southwest and United. For more information, read TPG Senior Points & Miles Contributor Nick Ewen’s post, 5 Reasons Chase Sapphire Preferred Should Be Your First Card in 2016.
2. Citi ThankYou Premier Card ($95; waived the first year)
Citi’s ThankYou Rewards program continues to emerge as a valuable program for travel rewards, thanks to the addition of partners like Virgin America. Like the Chase Sapphire Preferred, the Citi ThankYou Premier Card has an annual fee of $95 that’s waived the first year and no foreign transaction fees.
New applicants to the Citi ThankYou Premier earn 40,000 bonus points after spending $3,000 within the first three months of account opening. These points are worth $500 toward airfare, or can be transferred to miles with 12 different airline partners or Hilton HHonors points. Cardholders earn 3x points for travel and gas purchases, 2x points for dining out and entertainment and one point per dollar spent on all other purchases.
3. Starwood Preferred Guest Credit Card from American Express ($95; waived the first year)
This card has always had a passionate following among collectors of points and miles, and it got even better last year when Amex dropped its foreign transaction fees and added complimentary unlimited Boingo Wi-Fi access. More recently, the minimum spending requirement for the 25,000 point sign-up bonus was lowered to $3,000 within three months, putting it in easy reach of more applicants.
Cardholders earn points in the Starwood Preferred Guest program, which includes Westin, Sheraton and several other brands. Starpoints can be redeemed for free night stays in any unsold standard room, and when you redeem four nights in a row, your fifth night is free. And of course, Starpoints are extremely valuable when transferred to miles with 30 different airline programs. This card has an annual fee of $95 that’s waived the first year.
4. Amex EveryDay Credit Card from American Express (no fee)
The only thing better than a low annual fee — or a waived fee the first year — is no annual fee at all. The Amex EveryDay Credit Card from American Express is the only card that offers transfers of points to miles with no annual fee. After spending just $1,000 within three months of account opening, new applicants earn 10,000 points in Amex’s Membership Rewards program, which includes 16 airline transfer partners, such as Delta, Air Canada, Singapore and British Airways. Cardholders earn 2x points at US supermarkets (on up to $6,000 spent each year) and 1x points on all other purchases. In addition, cardholders receive a 20% points bonus for each statement period in which they make at least 20 transactions.
5. Citi Hilton HHonors Visa Signature Card (no fee)
This is another rare travel rewards card with no annual fee. New applicants earn 75,000 Hilton HHonors points after making just $2,000 in transactions within three months of account opening. You also get HHonors Silver status immediately and can upgrade to Gold status after four stays within your first 90 days of account opening, or when you make $20,000 in purchases within a calendar year.
With this card, you get 6x points for Hilton purchases, 3x points at supermarkets, drugstores, and gas stations and 2x points for all other purchases. And as a Visa Signature card, it also offers some solid travel and shopping benefits. For more information, read my post on Comparing Visa Signature and World Elite MasterCard Benefits.
6. Hilton HHonors Card from American Express (no fee)
Like Citi, Amex offers a no-fee Hilton HHonors card, the Hilton HHonors Card from American Express. The current sign-up offer is 40,000 Hilton HHonors points after making only $750 in purchases in the first three months of account opening. This card features instant HHonors Silver status and a fast track to Gold status after making $20,000 in purchases within a calendar year. You also earn 7x points for Hilton purchases, 5x points at US restaurants, supermarkets, and gas stations and 3x points elsewhere.
7. Alaska Airlines Visa Signature Card ($75)
This card has an annual fee of $75, which is less than those of most other comparable airline cards. New applicants receive 30,000 bonus miles after $1,000 spent within the first 90 days. Other benefits include 3x miles on Alaska purchases, a first bag checked free for up to seven traveling on the same reservation and an annual coach companion fare for $121.
8. The Hyatt Credit Card ($75)
This card has a reasonable $75 annual fee. New applicants earn two free nights at any Hyatt property after making just $1,000 in new purchases with three months of account opening, as well as 5,000 bonus points when an authorized cardholder is added who makes a purchase within the same three months. This card offers 3x points on purchases at Hyatt hotels, 2x points for purchases from restaurants, airlines and car rental agencies and one point per dollar spent elsewhere. Additionally, each year on the anniversary of your account opening, you’ll receive a certificate for a free night’s stay at any Category 1-4 property.
9. IHG Rewards Club Select Credit Card ($49; waived the first year)
This card has an annual fee of just $49 that’s waived the first year, and is currently offering 60,000 points after new applicants spent just $1,000 within the first three months of account opening. You also earn 5x points at IHG hotels — including Holiday Inn, Crowne Plaza, InterContinental and other brands — 2x points for purchases at gas stations, grocery stores and restaurants and 1x points elsewhere. Other benefits include no foreign transaction fees, complimentary Platinum Elite status, a 10% rebate on IHG Rewards Club point redemptions and an annual free night certificate.
You don’t have to spend a ton of money on annual fees to get a travel rewards card that earns you valuable points and offers great benefits. If you’re looking to add some new cards to your arsenal in 2016, hopefully this post has given you some ideas when it comes to low-fee options.
What’s your favorite low-fee credit card for travel rewards?
Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards