What is a no-annual-fee credit card?
Editor's Note
A no-annual-fee credit card is — you guessed it — a credit card that doesn't include an annual fee. That means you won't be charged a yearly fee to use the card, so you can enjoy any perks and earnings rates at a minimal cost.
But why do some cards have annual fees, and is it worth getting a card with an annual fee over a card without one? Keep reading to find out.
What is a credit card annual fee?
A credit card annual fee is a recurring fee that credit card companies charge users to maintain their accounts. It helps issuers cover the cost of card benefits, among other things and can range from $0 to more than $500 for the most exclusive cards.
Most lenders charge the fee annually, though some charge a monthly fee instead.
Related: The complete guide to credit card annual fees
Why do some cards have high annual fees?
Some premium rewards cards have annual fees in the hundreds of dollars, but the cards come with lucrative perks that can make paying the fee worthwhile ... if you can take advantage of them. For example, The Platinum Card® from American Express (see rates and fees) charges an annual fee of $895.
However, cardholders are eligible to receive hundreds of dollars in travel perks and statement credits, not to mention valuable earnings rates and other benefits, which help offset the yearly cost.
A pricey card like the Amex Platinum won't make sense for everyone, but if you're a frequent traveler who spends thousands of dollars each month, the card could be a valuable addition to your wallet.
Types of no-annual-fee credit cards
While not as lucrative as the Amex Platinum, many no-annual-fee credit cards offer rewards and other benefits. Here are a few types of no-annual-fee cards you can find on the market:
- Store-brand cards: Cobranded store credit cards offer earnings rates and rewards for a particular store brand, such as Amazon, Costco or Target. They are typically not very valuable if you don't shop at that store often.
- Cash-back cards: These cards offer a return on your spending as cash back, typically with bonus earnings in categories such as "travel" or "groceries."
- Airline cards: Issued by a specific airline program, the no-annual-fee options come with fewer perks than their more expensive counterparts.
- Hotel cards: These are similar to airline cards, but rewards for hotel cards are for a particular hotel loyalty program.
- Low-interest cards: These cards are designed to help you pay off debt at your own pace without worrying about interest. Many include an introductory 0% interest period.
- Balance transfer cards: Balance transfer cards usually waive the annual fee for the first year and allow users to transfer other credit card balances to the card and pay it off at a reduced interest rate.
Related: Cash back vs. travel rewards: How to choose a credit card
Should you get a no-annual-fee credit card?
Their low cost makes credit cards with no annual fees solid choices for many borrowers.
With no annual cost, these cards are easy to justify keeping in your wallet. And many no-annual-fee cards allow you to earn modest rewards and come with additional benefits.
Related: 7 reasons you should get (and keep) a no-annual-fee credit card
Bottom line
No-annual-fee credit cards are ideal for the cost-conscious borrower who wants the convenience of a credit card without worrying about fees. This type of card is also a good choice for anyone new to the world of credit cards, as it will allow you to learn the ropes before graduating to mid-tier and premium cards.
While premium credit cards offer more lucrative rewards and benefits, most come with high annual fees. Many no-annual-fee cards allow you to earn rewards without having to sort out bonus categories or satisfy high spending levels.
Related: The best premium credit cards: A side-by-side comparison
For rates and fees link for the Amex Platinum Card, click here
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Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.