Best Credit Cards with No Annual Fees
Not everyone needs a high-end credit card that comes with a slew of features but also charges a considerable annual fee. For many, simple no-frills credit cards serve the purpose perfectly well. What helps is that Canadians get numerous no-fee credit cards from which to choose.
Best No Annual Fee Credit Cards
The best no-fee credit cards are ones that come with additional features. For instance, some people benefit from getting no-fee cards that offer reduced interest rates on balance transfers. Some no-fee cards also give cardholders the ability to earn rewards or cashback.
Best No Annual Fee Credit Card with Cashback Reward
Tangerine Money-Back Credit Card
Earn up to 5% in GM Earnings1 on the first $5,000 spent annually, and 2% thereafter $0 19.99% 22.99% 22.99% Cashback, No Annual Fee $0 19.99% 21.99% No Annual Fee, Travel Rewards 12,500 Points Get 2% back in up to 3 categories of your choice 1.95% $0 19.95% 19.95% 19.95% Balance Transfer, Cashback, Low Interest, No Annual Fee
Specification: Scotiabank® GM®* Visa
Annual Fees Interest Rate Balance Transfer Cash Advance Network Card Type
Specification: Choice Card from American Express
Annual Fees Interest Rate Network Cash Advance Card Type Sign-up Bonus Featured!
Specification: Tangerine Cash Back Credit Card
Sign-up Bonus Balance Transfer Promo Annual Fees Interest Rate Balance Transfer Cash Advance Network Card Type
Earn up to 5% in GM Earnings1 on the first $5,000 spent annually, and 2% thereafter
Cashback, No Annual Fee
No Annual Fee, Travel Rewards
Get 2% back in up to 3 categories of your choice
Balance Transfer, Cashback, Low Interest, No Annual Fee
The card most likely to be the best no annual fee credit card for this year is the Tangerine Money-Back Credit Card, which was also popular in 2017. You receive 2 percent cashback in any two spending categories when you use this credit card for purchases. You also earn 0.5 percent cash back on anything else that you buy. Tangerine credits cashback once a month to your statement. You’ll get benefits in a third spending category receiving 2 percent cash back if you opt to let the bank place your earnings on a Tangerine savings account. The groupings available are restaurants, groceries, drugstore, gas, furniture, entertainment, recurring bills, hotel-motel, public transportation, home improvement, and parking. This credit card is well-liked in Canada because the category choices make it very customizable to your distinctive spending patterns.
Do No Fee Credit Cards Offer Rewards?
Some no-fee cards provide cashback or rewards. Some cards give you the ability to earn enhanced category-based cashback or rewards. With some cards, you also stand to gain signup bonuses.
Other Features on Offer
While no-fee credit cards tend to serve a fundamental purpose, card providers now try to attract more customers by offering one or more added features. These may include:
- Purchase insurance
- Limited travel insurance
- Extended warranties
- Discounts on auto rentals
- No foreign transaction fees
- Balance transfer offer
- 0% introductory APR
- A low-interest rate on purchases
Pay close attention to the interest you need to pay on purchases and cash advances. While paying no annual fee is great, you don’t want to end up paying high interest in return. This becomes particularly important if you don’t plan to pay your balance off in full each month because any outstanding balance continues to attract interest. The interest rate on purchases in Canada typically varies from 12.99% to 19.99%. For cash advances, most cards charge interest of 22.99%.
Are There Any Drawbacks to No Fee Credit Cards?
No-fee credit cards might work well for people who don’t plan to use additional features offered by cards that charge annual fees. However, if you wish to earn rewards or are looking for travel benefits, these cards might not be your best bet. For instance, while a no-fee card might offer cashback or rewards, the earn rate would typically be lower than other fee-based cards. In addition, a higher interest rate on purchases might work in offsetting you not paying an annual fee if you keep an outstanding balance in your account month after month.
How Do You Qualify?
Your creditworthiness plays a role in determining whether or not you qualify to apply for any particular no-fee credit card. While some cards require applicants to have fair credit scores (560 to 659), you might need good (660 to 724) or excellent (760 to 900) credit to apply for others. Some cards also have minimum income requirements.
If you’re looking for a basic no-frills credit card that you may use to make purchases and pay bills, you may consider getting a no-fee card. Take some time to go through existing offers and promotions, and compare your options well.
Why Use a No Annual Fee Credit Card
There has never been a better time to look for the best no annual fee credit card in Canada than now. Whether you’re looking for rewards, cashback, a free flight, miles, or low-interest rates, issuers are stuffing tons of value onto their no-annual-fee card offerings. There are usually four excellent reasons to look for the best no annual credit card for you:
- Firstly, you don’t spend enough to justify a yearly fee.
- Secondly, if your primary credit card is frozen or it gets lost or stolen, you’ll have a back-up in your wallet.
- Thirdly, you don’t need some of the extras offered by annual fee credit cards.
- Finally, you’re unwilling to commit to the account type without trying it first.
Regardless of your reason, it’s important to note that there have never been more credit cards without annual fees providing as much value as we have today.
No Annual Fees Credit Cards – Conclusion
If you like rewards, keep in mind that the best offer is no annual fee for the first year, coupled with a free flight’s welcome bonus. If there are no yearly fees, you can take out as many cards with strong welcome incentives as you’d like. Just make sure you pay attention to any minimum spend requirements and be careful to spread out your applications a bit. Besides that, it’s an excellent opportunity to obtain a free flight and to test different cards to figure out which rewards program is the best!
Compare Credit Cards with No Annual Fee
In some cases, no-fee cards can bear many great privileges and benefits with their use, such as cashback bonuses, travel benefits, medical benefits and other privileges. Here is an example: By owning an American Express AIR MILES Credit Card, you will reap one bonus mile for every $15 you spend in card transactions with approved and associated AIR MILES Sponsors as well as one bonus mile collected for every $20 you spend in other transactions. Additionally, you will also get a reward of 500 bonus miles the first time of using your card, and the best part is, there is no annual fee charged. In case you want some cashback benefits, getting the SimplyCash Card from American Express is a great option. This card offers up to 5% cashback that applies to all gas, supermarket, and restaurant transactions for an initial 6-month period and up to 1.25% cashback for all transactions that apply on the program after that. A lot of no-fee credit cards come with some pretty good benefits like rental vehicle discounts and deals, theft protection, 24-hour service in case of an issue, and others. As long as you pay the balance on time and you don’t use the card recklessly, you will reap these rewards with no extra fees.
Best No Fee Credit Cards
There are many ways banks waive fees or give away no-fee credit cards to their members.
Some credit card providers may waive their annual fees, usually on the first year for new customers and then charge low subsequent annual fees. Other banks may still charge annual fees but offer discounted fees or low-interest rates to their customers. Some credit card providers go far and beyond to lure potential members to sign up by offering zero fees or no fees on certain transactions, such as foreign transaction fees. Some banks may waive fees for foreign transactions, which are truly beneficial, especially to those who travel for pleasure, purchasing items along the way, and those conducting their businesses abroad who earn huge savings by not being imposed the extra fees for multiple international transactions. As usual, additional bonuses are offered to new customers, including cashback rewards and mileage points that can be converted to free airline tickets when the customers have accumulated enough points from their credit card transactions.
Advantages of a No Annual Fee Credit Card
As many consumers are aware, you need to pay annual fees with regular credit cards. This fee can be close to or over $100. On the other hand, you can have a credit card with no annual fees. The rewards on these cards might not be as attractive as other credit cards, but the non-existent annual fee is one of the greatest benefits.
If you have not already heard about them, here is your chance to learn about the many benefits of this type of credit card:
$0 vs. Fee-Based Credit Cards
As mentioned earlier and is clear from the name, this is the type of credit card where you don’t have to pay an annual fee. Banks are able to attract customers to cards with associated annual fees by offering rewards on them, also known as rewards credit cards. So when you purchase something with your regular credit card, you can earn points; these points help you save money in the future. If you notice carefully, you will realize that not only do these rewards lure you into getting fee-based cards, but they also encourage you to spend more. We encourage you to learn more about credit card interest fees.
On the contrary, banks make no annual fee credit cards less attractive by not offering any rewards. You can conclude from here that a fee-based card is best for people who shop very often. Therefore, they can collect a lot of reward points, which can be very beneficial for them. However, if you are very selective with your purchases on a credit card, then a card with no annual fee may be the best route for you.
Do You Get Rewards with No Annual Fee Credit Cards?
A straight answer to the question is yes. There are credit cards without annual fees that have rewards on them. The only drawback is that these rewards are not as attractive as the rewards you get with fee-based cards. You might have to do a lot of shopping or continue to shop for several months before you can collect significant reward points.
No Annual Fee Credit Cards in Canada
Most Canadian banks will push fee-based credit cards on you. They want you to pay those fees for their own benefit. On the other hand, nobody likes paying fees. When you do your research, always compare the value of the card, i.e., the value of rewards against the annual fee and whether or not it’s worth paying the annual fee. If your calculation shows the rewards are bigger than the annual fee, go for a fee-based credit card without any hesitation. However, for those who do not want to pay any fees on their credit cards, please continue reading.
The Best Options Available to You
From close to a dozen credit cards with no annual fees in Canada, here are the best 3.
- MBNA Rewards MasterCard
$0 19.99% 22.99% 24.99% Cashback
Specification: MBNA Rewards Platinum Plus® Mastercard®
Annual Fees Interest Rate Balance Transfer Cash Advance Network Card Type
The best thing about this card from MBNA is that there is no limit on the rewards points you gain on it. The major reward with this card is that it offers 1% cashback on the purchases you make. It even has insurance coverage, and it will not be wrong to say that it beats most other no annual fee credit cards in that department. Many cards have a lot of restrictions on how you can cash your rewards, but this one is unbelievably flexible with those rules. Here are the top reasons to get MBNA Rewards MasterCard:
- You earn one reward point for every dollar you spend.
- You can redeem earned points on your phone or online.
- There is no restriction on when you can redeem your points.
- There are many ways to redeem points, e.g., travel, bank deposit, charity, check, etc.
- There is coverage for car rental theft.
- Travelling accidents covered for up to $1 million.
- One year extended warranty.
- You get protection on purchases for up to 3 months.
- American Express Simply Cash Card
If you don’t want to deal with the complexities of credit cards and want a simple solution for your shopping, then this is the card for you. The American Express card beats the cashback offer of MBNA rewards MasterCard by offering you 1.25% for every purchase you make using this card. When you get the card, you will be able to purchase groceries and gas with a 5% bonus for half a year. However, there is a cap of a maximum of $250 on this particular offer. However, being able to earn up to $250 in just six months is quite an offer on a card that has no annual fees on it. Here are the reasons that make this card one of the best:
- The 1.25% cashback offer is the most generous in the no annual fee credit card world. We even have some tips on how to maximize your cashback credit card awards.
- You can earn as much cashback as possible since there is no cap on it.
- Balance transfers have an interest rate of only 1.99% for the first half of the year.
- Front of the Line advantage on ticket purchases.
- The First 6 months have a capped $250 bonus when you purchase gas and groceries.
- PC Financial World Elite MasterCard
If you like shopping at stores owned by Loblaws and their affiliated supermarkets, this is going to be your favourite no-annual-fee credit card. To make the best of this card, you can visit Loblaws stores and a few other authorized retailers on its list such as PC Travel, Esso and Shoppers Drug Mart. When you make purchases from these stores with PC Financial World Elite MasterCard, you earn 30 points for every dollar you spend. These 30 points translate to 3% of your money back into your pocket on your total expenditure. Here are the best things about this card:
- Best for people who like to shop at the stores mentioned above.
- People who shop at other stores will still get 10 points for every dollar spent.
- You are given 20,000 points welcome bonus when you get the card for the first time, which means $20 worth of free shopping.
- Purchase protection of 90 days and extended warranty for a year.
- Concierge customer service, so you are served like a special customer every time.
How to Make the Most of No Annual Fee Credit Cards
Use these tips to get maximum benefits from the cards mentioned above and any other no-annual-fee credit cards.
- Get your hands on multiple cards, e.g., use Simply Cash Card from American Express to do your regular shopping but carry PC Financial World Elite MasterCard when going to Loblaws stores.
- Pick the cards that meet your requirements the best. For example, if you are on a low income, the MBNA
- Rewards MasterCard and the Simply Cash Card from American Express are the best options for you.
- If you don’t want restrictions and regulations tied to your cashback rewards, you should go for MBNA cards.
- Learn more about how cashback rewards on credit cards work and how to make the most of cashback rewards. Although no annual fees credit cards don’t focus much on the rewards, if you know how the reward points work and how you can maximize them, you will get the best of both worlds.
We highly recommend you research other no-annual-fee credit cards before you make a decision. However, the three cards mentioned above have the best value in terms of offering special rewards to their customers.
Advantages of a No-Fee Credit Card
Using a credit card involves incurring various fees that you must pay to be a cardholder. These include cash advance fees, interest fees, penalties on late payment, and others. However, with a little smart thinking, you can save on the annual fee on the credit card. Premium credit cards that carry a high annual fee are advantageous only if you have a high income and make large purchases regularly. In this case, you would find the additional perks are well worth it. But if you’re looking for economical spending and don’t need perks, you might want to opt for a no-fee credit card.
Many credit card providers offer you credit cards at 0% for the initial 12 months. Once the promotional period ends, the usual annual fee is applicable. Depending on your usage and spending habits, you can opt for credit cards that carry no annual fees.
No-fee credit cards typically don’t offer many perks and benefits. For this reason, they are well-suited for the user who does not regularly charge large purchases on the credit card or travel much. If you would rather save on the annual fee and don’t need the added perks like, say, credit cards with travel rewards, no-fee credit cards are a good option. Choose these cards for situations where you absolutely need a credit card. For instance, online shopping, occasionally booking flights and hotel rooms or renting a car.
Paying annual fees is beneficial only if you use your credit card often and earn enough cashback and reward points that cancel out the yearly fee. Of course, you’ll have to make sure to pay off the credit card bill each month in full so you don’t incur any other fees.
For example, you could consider the Tangerine Money-Back Credit Card. This card earned the 2016 Product of the Year Canada™ award based on a national consumer voting survey. Here are the perks it offers:
- You earn 2% cashback on any two bonus categories you choose from their list, including entertainment, gas, utilities or recurring expenses, groceries, and others.
- You earn 0.5% cashback on all other categories.
- There is no limit on the earn-back amount.
- You can change the bonus categories at any time to match your spending habits.
- You’ll receive the rewards in your monthly statement.
- You can earn an additional 2% on the cashback you transfer into the Tangerine Savings Account.
- You need a secondary credit card
Owning a second card is always advisable and you can choose a credit card with no annual fees for various situations such as:
- You don’t make enough purchases that can cover the annual fees on a second card with the cashback perks.
- You lose your primary card or it is stolen or frozen and cannot be used.
- You need additional benefits that your primary card does not offer.
- You need to make purchases at a specific retailer that does not accept the primary card you own.
For example, consider the SimplyCash Card from American Express. Here are the benefits of using this card:
- For the first six months, you can avail of an introductory offer. You can earn 5% cashback up to $250 on the expenses on grocery, gas, and restaurant bills.
- After the initial six months, you’ll earn 1.25% on all other purchases, and there is no limit on the cashback earning potential.
- You get insurance protection
- The provider offers 24-hour customer assistance.
- If you’re applying online for the card as a new user, you can transfer balances from another card to this credit card. For the initial 6 months, you won’t incur any fees on the transferred amount.
- You may have to pay a 1% transfer fee and interest is applicable on this fee.
- You’re a new graduate
The last, but not least important reason why you should get a no-fee credit card. As a young person who has just graduated from university or college and now holding a full-time job, you could consider opting for the no-fee credit card. Here’s why:
- You may have been using a student credit card and having built a good credit score, you may be ready for an advanced card.
- No-fee credit cards are ideal for young people with low incomes so they can continue to build on their credit history.
- The no annual fee and cashback facility is highly beneficial for low-income users.
- If you have unpaid balances on a line of credit or student credit card, you can consider transferring the balance to the no-fee credit card. Such cards have low-interest rates, so you can use them to consolidate your debt.
- However, do take care to clear the debt before the end of the 6-month promotional period.
For example, consider the MBNA Platinum Plus MasterCard. Here are the benefits of this card:
- For the initial 12 months, you’ll pay 0% interest in the balance transfers from other cards.
- After the one-year period, you pay 21.99%.
- Protection from fraud
- Purchase assurance
- Extended warranty
- Insurance coverage of no liability
Does It Make Sense To Pay an Annual Fee for a Credit Card?
If you are considering applying for a new credit card, one of the facts to consider and to be noted is that certain cards do charge yearly fees. Many Canadians will reject these automatically and with great consideration, but what is next? Let us see what does and does not make sense regarding paying an annual fee for a credit card.
When do we choose a credit card with no fee?
A no-fee credit card has many obvious benefits – there is no need for you to pay for holding this type of credit card, so on your behalf there is no outgoing expense. Certain scenarios when this makes sense is when you just intend usage of your card for some emergencies, or when you want to build credit history too; when primary goal in credit card use is not the reward you get back. Another such occasion when it is smart to get a credit card with no yearly fee is when you spend a little every month to get enough rewards for the breakeven as opposed to the cost of the yearly fee. In such cases, the no-fee credit card represents a saving of approximately $99 to $120 yearly. Still, opting for a no-fee credit card does not mean by default not getting rewards. Let’s say, the BMO CashBack MasterCard will offer 1% cashback regarding all spending types and it brings along bonuses of even $75 after the initial purchases you made.
When does it make sense to pay for a credit card annual fee?
It could appear and seem counterintuitive, but to pay for a credit card is often a good value for the money since it comes with much better rewards subsequently. If you need to maximize the return, have a look at a rewards credit card, regardless if it comes even with a yearly fee. The best and most crucial factor is a net reward since this will determine the overall value of that card and will notify you if this charge is worth the pay. If the spending on groceries and cash is huge, then the Scotia Momentum Visa Infinite Card is the best choice because you can earn 4% for such purchases mentioned. When this is in comparison to the no-fee card that otherwise offers just regular cashback of 1%, you will get a bigger net reward with this card. In addition, for a limited time span, the $99 yearly fee also can be waived in the first 12 months. But, if you are not a driver and do not cook a lot at home, such a card is not the best option for you since it will operate as a 1% cashback card that you can get with ease and permanently with no fees.
Dynamic can be changed with special offers
There is another thing to be considered, and this is special promotions. They boost and raise a net reward that you will get and will at often times counteract the yearly fees. So, cards special offers with a yearly fee, in general, offer good bonus rates and welcome points too, making them incredibly lucrative. Let’s look at the BMO World Elite MasterCard as being a great choice of a travel rewards credit card. Apart from the collection of points on daily spending, such a card will also offer amazing signup bonuses, worth $507 as reward points, also the travel extras like VIP Airport Lounge Access as well. Extra travel insurance benefits are seen too and get more beneficial and appealing for those frequent flyers.
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Specification: Triangleᵀᴹ World Elite Mastercard®
Specification: Triangle™ Mastercard®
Specification: Home Trust Preferred Visa
Earn 1 AIR MILES Reward Mile for every $20 in credit card purchases*
Specification: BMO® AIR MILES®† No-Fee Business® Mastercard®*
Specification: Scotiabank Value® No-Fee Visa* Card
Specification: Scotia Momentum No-Fee VISA* card
Specification: HSBC Premier Mastercard
Specification: HSBC Advance Mastercard
Specification: CIBC Dividend® Visa* Card
Specification: CIBC Aventura® Visa* Card for Students
Earn up to 35,000 Aventura® Points† – that’s up to $800 towards your next flight.1 Plus, get a first-year annual fee rebate!†
Specification: CIBC Dividend® Visa* Card for Students
Specification: Rogers™ Platinum Mastercard®
Earn 1% in unlimited cash back rewards on all other eligible purchases
Specification: SimplyCash Card from American Express
Specification: Rogers World Elite Mastercard
Earn 1% in unlimited cash back rewards on all other eligible purchases
How Do No Fee Credit Cards Work?
Most credit cards require cardholders to pay annual fees for as long as their accounts remain active. In Canada, the annual fee typically varies from $120 to $150, although it is lower and higher in some cases. A no-fee card, as the name implies, does not charge any annual fees.
Cards that offer waivers of the first annual fee do not qualify as no-fee credit cards because you need to start paying the annual fee from the second year.
Should You Get a No Fee Credit Card?
One clear benefit of getting a no-fee credit card is that you don’t have to worry about paying ongoing annual fees. However, depending on your card usage, you might benefit by paying a fee for a card because the perks can help offset the fee you pay. Whether or not this is possible is something you need to determine based on how you plan to use your card.
A no-fee credit card is ideal if you’re not looking for much in the form of features. Not only can you use it to make in-store and online purchases, but you can also use it to build your creditworthiness, provided you use it in the right manner.
For you, the best credit card will always depend on basis on your personal spending adequately. It could seem complex to work this out, but the good part is that we will gladly do this hard work for you. Make sure you use our credit card rewards calculator and thus compare net rewards for each and every different type of card. Just enter the spending habits for a regular, average month all across categories such as restaurants, groceries or travel; then make a comparison of at least two cards or more, all side-by-side. Whatever you choose in the end, and whichever card type, keep in mind to ensure the chosen card is the very best offering for you.