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No one likes paying extra fees. The delivery fee on your pizza order, hefty airline fuel surcharges on your trip to Europe…extra fees are everywhere. Most people try to avoid them as best they can.
This same idea applies to people looking for credit cards with no annual fee. For many reasons, you don't want to pay a fee to keep that card in your wallet year after year. However, you may read that these are “no fee” credit cards. Beware whenever you see that language used about credit cards. Here's why.
Why Should You Care About No-Annual-Fee Cards?
There are a lot of no-annual-fee cards that are great to have in your wallet to help you in your miles and points journey. And you shouldn't overlook these cards despite their low price point. Here's a handful of reasons why you should keep some on your radar:
- Transferrable points: Several no-annual-fee cards such as the Chase Freedom Unlimited®, Citi Double Cash® Card, and The Blue Business® Plus Credit Card from American Express allow you to earn transferrable points. These points are transferrable to airline and hotel partners that you can turn into free (or nearly free) travel.
- Extra perks & benefits: Many no-annual-fee cards come with special perks. For example, Bank of America has several cards that allow for free general admission to over 200 museums. Chase offers you credits to use with Doordash and Instacart.
- 0% APR for a limited time: Some cards might offer you 0% introductory APR on purchases and balance transfers. This intro rate is beneficial if you're trying to pay off a large purchase or attempting to reduce credit card debt. However, it is very important to pay off your balance before the end of the offer. Otherwise, you would pay extra fees plus interest accrued during the period when the APR was 0%.
- No annual fee for the first year: A no-annual fee during the first year of ownership allows you to “test drive” the card to see if it aligns with your spending habits and benefit needs. Some examples include the Delta SkyMiles® Gold American Express Card (Rates & Fees), The New United℠ Explorer Card (Rates & Fees), and the Citi® / AAdvantage® Platinum Select® World Elite Mastercard®.
Despite the lack of annual fee, each and every card mentioned has a lot of other fees. Let's talk about why that matters.
Why No-Annual-Fee Cards Are Not No-Fee Cards
While these are all interesting cards, they are not all “no fee;” you can incur fees of various kinds on each of them. Let's take three popular credit cards with no annual fee: Chase Freedom Unlimited®, Citi Double Cash® Card, and The Blue Business® Plus Credit Card from American Express (Rates & Fees).
There's no fee for keeping these cards in your wallet year after year. However, labeling these credit cards as “no fee” can be misleading. These cards do have tons of fees — just not annual fees.
Consider that the Freedom Unlimited has the following fees:
- Balance transfer fee: Either $5 or 3% of the amount of each transfer made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer. Whichever value is greater will apply in both cases.
- Cash advance fee: Either $10 or 5% of the amount of each transaction, whichever is greater.
- Foreign transaction fee: 3% of each transaction in U.S. dollars
- Interest fees: 18.99% - 28.49% Variable APR if you don't pay your full monthly balance.
- Late payment fee: Up to $40.
- Returned payment fee: Up to $40.
- Intro Offer: Earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase Travel℠, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can choose to receive a statement credit or direct deposit into most U.S. checking and savings accounts. Cash Back rewards do not expire as long as your account is open!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.99% - 28.49%.
- No annual fee - You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
- Rates & Fees
- Earn 5% on purchases through Chase Travel℠
- Earn 3% on dining at restaurants
- Earn 3% on drugstore purchases
- Earn 1.5% on all purchases
Similarly, the Citi Double Cash has these fees:
- Balance transfer fee: There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5)
- Cash advance fee: 5% of each cash advance; $10 minimum
- Foreign transaction fee: 3%
- Interest fees: 18.24% - 28.24% (Variable) APR if you don't pay your balance in full each month.
- Late payment fee: See Terms
- Returned payment fee: Up to $41.
If you're looking to pay down debt or finance a larger purchase, this card also comes with one of the best available introductory APR offers on balance transfers.
- Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
- 2% cash back on every purchase - 1% when you buy + 1% when you pay
- 0% intro APR on balance transfers for 18 months. After that, the (Variable) APR will be 18.24% - 28.24% based on your creditworthiness
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5)
- No annual fee
- Earn 2% cash back on every purchase—1% when you buy and 1% when you pay. Plus, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/25. Citi cash rewards now also convert to ThankYou points at 1:1 ($10 = 100 ThankYou points).
And the Blue Business Plus publishes these fees:
- Foreign transaction fee: 2.7% of each transaction after conversion to U.S. Dollars. (Rates & Fees)
- Interest fees: 17.49% - 27.49% Variable APR if you don't pay your balance in full each month. (Rates & Fees)
- Late payment fee: Up to $39 (Rates & Fees)
- Returned payment fee: Up to $39. (Rates & Fees)
- Earn 15,000 Membership Rewards® points after you spend $3,000 in eligible purchases on the Card within your first 3 months of Card Membership.
- 0.0% intro APR on purchases for 12 months from the date of account opening, then a variable rate, 17.49% - 27.49%, based on your creditworthiness and other factors at account opening. APR will not exceed 29.99%
- Earn 2X points on everyday business purchases such as office supplies or client dinners. 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter. Terms and limitations apply.
- You've got the power to spend beyond your credit limit* with Expanded Buying Power. *The amount you can spend above your credit limit is flexible, so it adapts with your use of the Card, your payment history, credit record, financial resources known to us, and other factors. Just remember, the amount you can spend with Expanded Buying Power is not unlimited.
- No Annual Fee
- Terms Apply.
- Rates & Fees
- Earn 2X points on everyday business purchases such as office supplies or client dinners. 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter. Terms and limitations apply.
As you can see, these cards do have fees. There's no annual fee, but there are many other fees you could encounter.
Even the more recently announced TD Clear Visa Platinum Credit Card has fees, despite the marketing points. While you don't pay an annual fee, foreign transaction fees, or late payment fees, there is a monthly fee and a monthly payment amount.
Our Take
Why does this matter? It's important that credit card consumers understand the details of their credit cards. Surprise fees don't help anyone. You may be shocked if one of these fees shows up on your credit card statement after hearing it referenced as a “no fee” credit card. More than likely, it has a host of fees you could encounter. Most likely, your card simply has no annual fee.
Understanding the difference between a “no-fee” card and a “no-annual-fee” card can help you avoid surprises when your credit card statement arrives.
For rates and fees of the cards mentioned in this post, please visit the following links: Delta SkyMiles® Gold American Express Card (Rates & Fees), The New United℠ Explorer Card (Rates & Fees), The Blue Business® Plus Credit Card from American Express (Rates & Fees), and Chase Freedom Unlimited® (Rates & Fees)
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