Best No Annual Fee Credit Cards for 2020

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Credit cards with no annual fee can be a great way to earn rewards.
Image Credit: Clark.com

Are you looking for a free credit card? Well, there’s actually no such thing as free in the credit card world, but you can get a card that has no annual fee.

In fact, there’s a pretty wide variety of no annual fee credit cards on the market. Some of them have great rewards programs, while others focus on cash back bonuses or low-interest offers.

Money expert Clark Howard is a strong proponent of picking out a no annual fee credit card that offers you the best mix of cash rewards and low rates.

“No annual fee cards are best for most consumers because — from the get-go — you aren’t having to lay out any money to use these cards,” Clark says.

“I’m really strident on that because, in many cases, those annual fee cards are simply aspirational for consumers. People pay those big annual fees and get those cards because they get sucked in by the fantasy of ‘Hey, if I get this card I’m going to Tahiti! And that’s going to be me on the beach in Maui!’ We conspire against ourselves because we daydream about what we’re going to have.”

Keeping with Clark’s advice to keep our financial heads out of the sky, let’s set the focus on finding the best no annual fee card for your wallet.

In this article, I have some tips for picking the right no annual fee credit card as well as some suggestions for the top cards on the market.


Table of Contents


Top “No Annual Fee” Credit Cards to Apply for Right Now

Best Card For...No Annual Fee Credit CardTop Perk
Best for TravelDiscover it® Miles1.5x miles earned on every dollar spent
Best for Everyday RewardsCiti® Double Cash CardUnlimited 2% cash back on all purchases
Best for Shopping OnlineAmazon Prime Rewards Visa5% cash back on Amazon and Whole Foods purchases
Best for Grocery ShoppingChase Freedom Flex5% cash back on groceries for first year
Best for Dining and EntertainmentCapital One SavorOneUnlimited 3% cash back on dining and entertainment spending
Best for Gas PurchasesCostco Anywhere Visa® Card by Citi4% cash back on gas purchases, plus Costco benefits
Best for Cash Back BonusesDiscover it Cash BackRotating 5% cash back categories, plus a Year 1 cashback match
Best for 0% Balance TransfersU.S. Bank Visa Platinum Card20 months of 0% APR on balance transfers
Best for 0% New PurchasesChase Freedom Unlimited®15 months of 0% on new purchases, plus cash back rewards

Team Clark spent hours reviewing the market for these cards and put them to the test of guidelines set by money expert Clark Howard. We considered factors like rewards programs, welcome bonuses, length of introductory APR periods and bonus categories.

You can read more on the methodology for determining the best no annual fee credit cards here.


Best for Travel: Discover it® Miles

Discover it Miles is one the best no annual fee travel credit cards.

What to Know About This Card

  • You earn an unlimited 1.5x miles for each dollar you spend with this card. There are no category spending requirements.
  • The miles earned with this card can be used for any airline.
  • There are no travel blackout dates.
  • Discover will match the amount of miles you earn in your first year of card membership. That means you’ll double your miles with no cap.
  • This card carries an introductory 0% APR on new purchases for 14 months.

Why We Like It

Truthfully, the best travel cards usually carry at least a small annual fee. For example, the Southwest Rapid Rewards cards are popular and have two options with an annual fee under $100.

But as far as the no annual fee travel cards go, we like this one because the rewards are not tied to one specific hotel or airline brand. It doesn’t even require you to spend on travel to get miles as a reward. And it allows you to convert your miles to cash back if you decide you’re not looking to travel.

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Clark says that you should assess your spending habits before making a travel credit card your top choice. The average consumer is likely to benefit from a more generic form of rewards.


Best for Everyday Rewards: Citi® Double Cash Card

Citi® Double Cash gives 2% unlimited cash back rewards.

What to Know About This Card

  • You can earn unlimited 2% cash back on every purchase regardless of spending category.
  • Cash back is awarded in two different phases: 1% when you make purchases and 1% when you pay your credit card bill.
  • There is an 18-month introductory period for 0% APR on balance transfers.
  • To cash in on the balance transfer offer, you must complete your transfer within the first four months of card membership. There is a 3% fee on the amount transferred (minimum $5).
  • You get special access to purchases tickets to events through the Citi Entertainment program.

Why We Like It

For the average consumer, a slow-and-steady cash back return often wins the race. If you spend your money at a variety of places for a variety of reasons, you may find that you’re better off locking in the returns of an unlimited 2% cash back card. That way you know that you’re getting a solid rate of return on your purchase no matter what.

This is one of the cards in Clark Howard’s wallet, but it’s not the only game in town. You could opt for the PayPal Cashback Mastercard instead. It too offers an unlimited 2% cash back on all purchases.


Best for Shopping Online: Amazon Prime Rewards Visa

The Amazon Prime Visa Rewards card gives 5% cash back on Amazon and Whole Foods purchases.

What to Know About This Card

  • Earn 5% cash back on purchases made with your Amazon Prime subscription.
  • Amazon is giving away $100 gift cards to new cardholders as a welcome bonus.
  • Purchases from Whole Foods, which is owned by Amazon, also are eligible for 5% cash back.
  • You can also earn 2% cash back on restaurant, gas station and drugstore purchases.
  • There are no foreign transaction fees with this card.

Why We Like It

This is a no-brainer for Amazon loyalists. If you have a Prime membership and have packages arriving at your door on a near-daily basis, this card is an easy way to save 5% on everything that you purchase from Amazon.

If you’re not an Amazon shopper, you may want to consider a card for the brand to which you’re most loyal. For example, the Capital One® Walmart Rewards™ Card and Target RedCard both offer 5% cash back on online purchases you make through their websites.


Best for Grocery Shopping: Chase Freedom Flex

Chase Freedom Flex has a first-year bonus of 5% cash back on groceries.

What to Know About This Card

  • Get 5% cash back on grocery store purchases on up to $12,000 in spending for the first year of card membership.
  • Grocery purchases made at places like Walmart and Target are specifically excluded.
  • There is a $200 welcome bonus if you spend $500 on purchases in the first three months after opening the account.
  • More cash back bonuses include: 5% on rotating categories each quarter, 5% on travel purchased through Chase Ultimate Rewards and 3% on purchases from restaurants and drug stores.
  • There’s an introductory 0% APR period on new purchases for 15 months.

Why We Like It

Team Clark likes the Blue Cash Preferred from American Express as our top grocery shopping card with 6% cash back, but it carries a $95 annual fee. So while the 5% cash back grocery perk is temporary on the Freedom Flex, it’s still our top choice for no annual fee options thanks to its wide variety of benefits beyond the groceries.

This card is very similar to the Chase Freedom Unlimited card (featured later in this article) because they share a 15-month 0% APR introductory period. You’ll want to study the differences between the two to pick which is best for your wallet.

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Best for Dining and Entertainment: SavorOne® Rewards from Capital One®

The Capital One SavorOne card offers 3% cash back on dining and entertainment.

What to Know About This Card

  • You get unlimited 3% cash back on all purchases in the dining and entertainment categories.
  • You also can earn 2% cash back on select grocery purchases (exlcuding Walmart and Target).
  • Earn a one-time $200 cash bonus once you spend $500 on purchases within the first three months from account opening.
  • You can earn 5% cash back on purchases through Uber Eats. (This is a promotion that ends in 2021.)
  • There’s an introductory 0% APR period on new purchases for 15 months.

Why We Like It

If you’re the type of person who is out on the town a lot, this card could easily make itself useful with 3% cash back on dining and entertainment purchases. The dining purchases can vary from the nicest restaurant in town to the cheapest fast food, so you’re covered no matter how you like to grub. And the entertainment category includes tickets to concerts, sporting events, movies, and more.

If you want to step up your dining and entertainment rewards to the next level, Capital One boosts the bonuses to 4% with the Savor card. That one carries an annual fee, though. Team Clark helps you compare the Savor and SavorOne here.


Best for Gas Rewards: Costco Anywhere Visa® Card by Citi

What to Know About This Card

  • You get 4% cash back on qualifying gas purchases for up to $7,000 in spending per year.
  • This card also includes the following cash back bonuses: 3% on restaurants and travel, 2% on Costco purchases, 1% on all other purchases.
  • You must have a Costco membership to avoid an annual fee.
  • This credit card will double as your Costco membership I.D.
  • This card carries no foreign transaction fees.

Why We Like It

If you’re a fan of Clark’s, you probably know by now that he’s a big fan of Costco. He does much of his shopping there, and he carries this card in his wallet.

The 4% cash back on gas purchases is a great reason to get this card on its own, but Clark would tell you that there are even more savings to be had: You get 2% cash back on all purchases made through Costco with this card.


Best for Cash Back Bonuses: Discover it® Cash Back

Discover it Cash Back offers 14 months of 0% APR.

What to Know About This Card

  • Discover offers 5% cash back on a different spending category each quarter.
  • The 5% reward is capped at $1,500 in spending each quarter. All other purchases earn 1% cash back.
  • The Discover Cashback Match guarantees that you’ll get double the amount cash back you earn during the first year of card membership.
  • There’s an introductory 0% APR on new purchases for 14 months.
  • You can connect your Discover card to your Amazon and PayPal accounts to use your cash back earnings as direct payment options.

Why We Like It

What makes the Discover it card so appealing is the 5% cash back categories combined with the cash back match for the first year of card membership. For example, you can earn up to $75 in cash back each quarter if you max spend on the rotating 5% cash back categories. When you apply the cash back match to that spending, you’d be in line for $600 in cash back rewards for spending $6,000 in one year.

As Discover makes its second appearance on our list, you may notice that its consumer-friendly motto is perfect for this article: “No annual fee on any card.”


Best for 0% Balance Transfers: U.S. Bank Visa Platinum

The U.S. Bank Platinum Visa Card offers 20 months of 0% APR.

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What to Know About This Card

  • This card gives you an introductory period of 20 months for 0% APR on both balance transfers and new purchases.
  • The balance transfer fee is 3% or $5, whichever is greater.
  • You must make your balance transfer within the first 60 days of card membership in order to get the introductory interest rate.
  • This card offers you cell phone protection if you pay your wireless bill with the card each month. That can help you save big if your phone is damaged or stolen.

Why We Like It

It’s hard to beat the 20-month period for 0% APR on both new purchases and balance transfers.

Clark would prefer that you contact your local credit union to inquire about a credit card with a long-term low interest rate. But this card could serve as a stopgap if you find yourself in a tough spot and need to make a purchase or move a balance and still avoid paying interest.


Best for 0% New Purchases: Chase Freedom Unlimited®

What to Know About This Card

  • This card offers an introductory 0% APR period on new purchases for 15 months.
  • You earn unlimited 1.5% cash back on everyday purchases.
  • You get 5% cash back on grocery store purchases on up to $12,000 in spending for the first year of card membership.
  • Bonus cash back categories include: 5% on travel purchased through Chase Ultimate Rewards and 3% on purchases from restaurants and drug stores.
  • There is a $200 welcome bonus if you spend $500 on purchases in the first three months you have the account.

Why We Like It

You can probably find some cards that offer a few extra months of 0% APR on the introductory offer, but we like this one best because it offers more long-term benefits than many of the other cards in this category. You’ll get an easy-to-achieve welcome bonus and cash back categories that last well beyond the introductory offer.

This card is very similar to the Chase Freedom Flex, mentioned earlier in the article, thanks to the 5% cash back grocery offer. You’ll want to study the differences between the two to pick which is best for your wallet.


Clark Howard’s Strategy for “No Annual Fee” Credit Cards

Clark says he likes to divide the “no annual fee” credit card market into two sectors: cards for people who are running a monthly balance and cards for people who are paying their bills in full each month.

If you ARE NOT paying your credit card bill in full each month, Clark says:

“For people who run balances on your credit cards, I want you to check with your local credit union. Credit unions are almost always going to be the cheapest on the interest rate. A lot of the credit unions are still in single digits on the interest rate if you’re forced to run a balance. Not that anyone should jump for joy if they’re paying 9% interest, but the normal average credit card rate is up around 18%. So you can cut your interest rate in half with a good credit union card.”

If you ARE paying your credit card bill in full each month, Clark says:

“For people who don’t run a balance, doing a 2% cash back card is my favorite strategy. My second favorite is getting a card like the one from Costco or Sam’s Club. That’s particularly if you are the type of person who can be disciplined and say ‘OK, I will use this card at this place and the other card at that place.’ Then you’re the type of person who can take no annual fee cards and really maximize your rewards. You could earn 4% in rewards on gas, 3% at your favorite restaurants, and the Costco card even gives you 2% on everything you buy in the store or on their website.”

Clark’s General Strategy on Credit Cards

Clark believes it is important to have a credit card for the purpose of building and maintaining a solid credit history. That’s to prepare you for big life events like a home purchase or job application which require credit checks.

He also believes that focusing on credit card rewards — like those offered on no annual fee credit cards — should be a consideration only for people who pay off their balances each month.

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Assuming you’re here because you are in search of the maximum benefits from your credit cards, Clark wants you to think about how you spend your money and how that might best be complemented by the rewards programs from the various cards.

“Really think through your charge patterns and whether or not those rewards really give you a bang for your buck.”

Clark carries the Costco Anywhere Visa card in his wallet because he’s a frequent Costco shopper. He also likes the Citi Double Cash card because of the simplicity of the unlimited 2% cash back program.


Methodology for No Annual Fee Credit Cards

For the purposes of determining which cards are “best” in this category, we got input from money expert Clark Howard and sought to find cards that best fit his credit card strategy.

Team Clark spent many hours reviewing the available no annual fee credit cards on the market, assessing them for several factors including:

  • Welcome bonuses
  • Rewards programs
  • Length of introductory APR periods
  • Balance transfer introductory periods
  • Additional fees (transaction or otherwise)
  • Perks offered to cardholders

For obvious reasons, we did not include cards with annual fees. Unless there is a very specific reason to carry a card with an annual fee, Clark advises against it.

We also did not include offerings from local or regional banks and credit unions because they’re not available to everyone. Clark recommends that, if you need to carry a balance, check with your local credit union for a no annual fee card that has a low, fixed interest rate.

Often, local institutions will have desirable cards, so you should compare your local bank or credit union’s credit cards to the ones that made this list.


Frequently Asked Questions: No Annual Fee Credit Cards

Are “free credit cards” actually free?

Some people may refer to cards that have no annual fee as “free.” While it may be true that you don’t have to pay for the privilege to carry the card, you still could be subject to a variety of fees if you’re not careful. Aside from interest charges on any balance you carry, you may also be charged for things like balance transfers, cash advances, late payments and more.

On a no annual fee card, which is better: good rewards or low rates?

This depends on the type of consumer you are. If you’re someone who often has a balance left over at the end of the month, Clark says you need to find a card with the lowest interest rate possible. If you are diligent about paying your bill in full each month, you may be better suited to using a card that rewards your spending.

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