Which Credit Card Has The Lowest Annual Fee
From the list on this page, the Capital One QuicksilverOne Cash Rewards Credit Card has the lowest annual fee, but that’s a credit card for people with only fair credit. It’s a good credit card if your credit isn’t good, but otherwise, you likely wouldn’t want to get this card.
If you’re interested in looking for a credit card with a low annual fee, you can find many with a $95 annual fee . Those cards tend to have excellent rewards – though they aren’t quite the cream of the crop as some of the cards with, say, a $300 or higher annual fee. When you find credit cards with an annual fee of several hundred dollars, you know there’s a good chance, if you use the perks of the card a lot, you might save hundreds of dollars more.
The best thing, though, is to not over-generalize and look at each credit card on its merits and compare the rewards and think about how each card fits in with your spending lifestyle. A credit card with a steep fee may not bring you as much financial satisfaction as a credit card with a $95 annual fee, and in some cases, a credit card with no annual fee may the better way to go.
Everybody is different in terms of how they spend money, and so it’s best to comparison shop before grabbing the first card you see.
Basically, as long as you use the credit card frequently, you should get more than enough rewards to completely offset the annual fee fee pretty quickly.
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When Is An Annual Fee Credit Card Worth It
Modified date: Oct. 8, 2021
Annual fees on credit cards often seem unnecessary. After all, there are so many cards out there that offer good rewards and no fee. Why should you pay for the right to spend money?
So are there any situations in which getting a card with an annual fee makes sense?
Here are five scenarios where it can be worthwhile to pay for an annual fee:
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Blue Cash Everyday From American Express: Best For Groceries
Why its great in one sentence: The Blue Cash Everyday card offers a generous introductory interest rate on purchases for 15 months while also earning 3% cash back at US supermarkets and 2% back at US gas stations, all with no annual fee .
This card is right for: People who want to temporarily avoid high interest rates on their purchases, but who also spend a significant amount of their budget at US supermarkets and gas stations.
- Earn 3% cash back at US supermarkets on up to $6,000 per year in purchases .
- Earn 2% cash back at US gas stations and select US department stores.
- Earn 1% cash back on everything else.
- Cash back is earned in the form of reward dollars that can be redeemed as a statement credit.
- 0% APR on all purchases for the first 15 months .
- Car rental loss and damage insurance included.
- No annual fee.
- Terms apply.
Welcome bonus: Earn $200 cash back as a statement credit after you spend $2,000 in purchases on your new card in the first six months after opening the account.
What we like most about the Blue Cash Everyday: For many Americans, a significant portion of the monthly family budget goes to supermarket and gas station expenses. The no-annual-fee Blue Cash Everyday card dials up the bonus cash back on those two categories, creating a go-to in your wallet for two routine purchases.
Related: Amex Blue Cash Preferred vs. Blue Cash Everyday: Which is best for you?
How To Avoid An Annual Credit Card Fee
If you decide the annual fee isn’t worth it after the first year of using the card, you can close the account. Before you do, you should:
- Redeem any rewards you’ve accumulated.
- Check if you can switch to a no-fee credit card with the same issuer.
Switching to another credit card can allow you to avoid an annual fee without damaging your credit score. Downgrading your account may cost you some benefits or prevent you from earning any rewards at all. However, by downgrading, you’ve avoided the annual fee, which may make more financial sense if you were not using the rewards associated with it.
Some credit cards may waive the annual fee on a regular basis if you charge a certain amount on your credit card each year. Contact your credit card issuer to find out if your annual fee can be waived based on your account activity, payment history, or length of time as a customer.
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Getting Value From Points And Miles
For some travelers, simply earning points and miles on purchases and then redeeming for travel purchases can provide excellent value.
For example, the Chase Sapphire Preferred® Card offers two points per $1 spent on travel and dining at restaurants, plus one point per $1 spent on all other purchases. Those points are worth 1.25 cents each when redeemed for travel through Chase Ultimate Rewards®. Depending on how you typically spend and redeem points, you might get more than enough value every year to make up for the cards $95 annual fee.
People who are loyal to a particular airline or hotel brand can get value from a travel card, too. The Marriott Bonvoy Boundless® Credit Card offers six points per $1 spent at participating Marriott Bonvoy hotels and two points per $1 spent on all other purchases. If you earn enough points to redeem for an award night, you might save enough money to make up for the cards $95 annual fee.
Take a look at our latest point valuations to see what your credit card points and miles are worth.
Robinsons Bank Dos Mastercard
Ideal for: Low-income earners
Minimum monthly income requirement: PHP 15,000 / PHP 20,000
Installment payments are an attractive option if you want to save money when buying something. With Robinsons Banks DOS Mastercard, all your purchases are automatically converted to a two-month installmentwith no minimum amount required and no interest! Whether youre buying groceries in bulk or a plane ticket, you can make your payments lighter with this credit card.
Key features and benefits:
- No annual fee for life when the Robinsons Bank credit card is used 12 times or more within a year, every year
- Earn 1 rewards point for every PHP 50 spent
- Automatic conversion of all straight purchases to two-month 0% installment
Fees and charges:
- Annual fee : PHP 100 per month / PHP 3,000
- Interest rate: 2%
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Will You Get More Value Back For Paying The Annual Fee
If you’re paying a $500 annual fee but the value of the perks you’re receiving doesn’t equal or exceed $500, then the fee may not be worth it for you. Sometimes, it’s easy to tell whether the value of the perks outweigh the fee like the $300 travel credit and $60 DoorDash credit can help offset the $550 fee for the Chase Sapphire Reserve® card. Throw in the Priority Pass airport lounge membership and Lyft Pink membership and you’re getting more value from the card than what you paid for the annual fee.
But other times, you may have to do a little math to make sure your regular spending offsets the annual fee.
“If it’s a cash-back percentage, look at how much you spent on groceries, then multiply that by the percentage and see how much you’ll get back on groceries,” Falcone says. As an example, let’s look at the Blue Cash Preferred® Card from American Express, which offers 6% cash back at U.S. supermarkets, up to $6,000 per year in purchases , and has a $95 annual fee after the first year .
If you spent $4,000 on groceries at U.S. supermarkets last year and expect to spend a similar amount this year, you can multiply $4,000 by 0.06 to get $240 in cash back on your groceries this year. This more than offsets the cost of that $95 annual fee.
What If I Want To Cancel The Credit Card After The Annual Fee Is Charged
First thing’s first: You can cancel a credit card at any time, as long as the balance is $0. So if the annual fee has already been charged, you’ll usually need to pay it before you can cancel the card.
If you have questions about your annual fee, call your credit card company to talk about your options they’ll be able to let you know when it’s charged, how long you’ll have to pay it and anything else you need to know before you can cancel the card.
Other ways to avoid a credit card annual fee
- A selection of credit cards offer no annual fee for life, giving you a way to avoid this cost on an ongoing basis.
- Annual fee waivers. Some credit cards offer to waive or refund the cost of the annual fee when you meet certain conditions, such as spending a set amount each month or year. You can check your credit card’s terms and conditions or ask the provider to find out if this type of waiver is available on your current card.
- Home loan packages. Some banks offer to waive a credit cards annual fee when you request the card as part of a home package.
- Promotional $0 annual fee for life offers. These offers are rare, but sometimes a credit card company will run a promotion that gives you $0 annual fee for life on a credit card that normally charges an annual fee. However, there are very few opportunities to get a $0 annual fee in this way.
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Why Do Some Credit Cards Carry An Annual Fee
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There are so many great credit cards on the market that , you might wonder why anyone would choose to get one that does. After all, what’s the point of paying up every year if you don’t have to?
It’s true that fees are one of the . But it’s also true that it can make sense to use a card with an annual fee, especially if you’re building credit or interested in getting additional perks. Heres why.
If you have or , there are a number of no-fee credit cards available. Sometimes, though, you can get a feature you want if youre willing to pay an annual fee. Just be aware that the annual fee, plus an initial security deposit, can add up to a high upfront cost, so budget accordingly.
Here are some options:
If you dont have a bank account: The has a annual fee, and it doesnt require you to have a bank account to apply. Like other secured cards, you must make a cash deposit, which becomes your credit limit. With the , you can fund the deposit with a check, debit card, money order or through Western Union.
If youd prefer a lower interest rate: High annual percentage rates are a hallmark of many , but the -annual-fee is different. .
When Are Annual Fees Typically Charged
You should see the charge for your annual fee on your first credit card statement. Some cards waive the annual fee of $95 for the first year. The annual fee for that card would then occur on your first anniversary of opening the card. Usually, you will see a one-time charge on the first day of your anniversary month.
For example, if you opened your new card on January 15th, 2020, you should expect a one-time charge for the annual fee the first week of January 2021. Many cards offer anniversary gifts each year, such as a travel credit. If your card does offer annual credits, they will be available at the same time as your annual fee is charged.
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Is It Ever Worth Paying An Annual Fee For A Credit Card
Read more: Annual fees aren’t always worth it, but with these 5 cards the benefits are worth more than what you’ll pay each year
In many cases, cards with annual fees have perks that are tied to travel, and if you rarely hit the road, these may not be the perfect fit. Always do an honest assessment of a card’s perks and see how they match up with your lifestyle before applying for a credit card.
Capital One Venture Rewards Credit Card Vs Capital One Ventureone Rewards Credit Card
These two Capital One cards can be confusing by their names alone. The Capital One Venture is the fee-based version, while the Capital One VentureOne does not incur an annual fee. Heres an overview of the benefits of these cards:
|Capital One VentureOne|
The Capital One Venture has a higher sign-up bonus and a Global Entry or TSA PreCheck application fee credit that you can use every four years. But, if youre not sure which card would be better for you long-term, lets look at the break-even point after your first year.
The following calculations depend on your spending habits and how you plan to redeem your miles.
If you redeem for travel at a rate of one cent per mile, youll earn 0.75 miles more per dollar spent on the Capital One Venture. As such, the annual break-even point is:
$95 / 0.75 cents per mile = $12,666.67
On the other hand, if youll transfer your miles to travel partners and agree with TPGs valuation of Capital One miles at 1.4 cents each, then youll earn 1.05 miles more per dollar spent on the Capital One Venture. In this case, the annual break-even point is:
$95 / 1.05 cents per mile = $9,047.62
Both calculations ignore the Global Entry or TSA PreCheck application fee credit that you can get every four years on the Capital One Venture. So, if your spending is close to the breakeven point and youd use this credit, it will make sense to get the Capital One Venture instead of the Capital One VentureOne.
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Why Do Credit Cards Have Annual Fees
The short answer is: Issuing credit cards is a business, and financial institutions have determined that it’s smart business to attach an annual fee to some credit cards in order to make a profit.
A longer answer: Credit card companies make money off merchant fees, that is , charging sellers a little piece of the action when consumers pay for items with their credit card. They also, of course, make money off of interest and fees that they charge.
If you’re a consumer who uses your credit card all the time and pays in full, on time, and you easily make back that annual fee, you’re a profitable customer, due to all the merchant fees the credit card is collecting when you use your credit card. On the other hand, think about the cardholder who carries a balance and pays interest to the credit card company – and pays that annual fee – that person is arguably a real catch for the credit card company.
Why Trust Our Recommendations
At Personal Finance Insider, our goal is to help readers make the best decisions with their money. To that end, we spend hours comparing and contrasting the features and benefits of top credit cards so you don’t have to.
We understand that “best” can be subjective, so we also include information on where each credit card excels, and where it may fall short.
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Can You Get Similar Benefits From A Less Expensive Credit Card
As competition for new cardholders continues to heat up, lenders are increasingly adding lucrative perks to cards with lower fees. At one time, travel credits, such as application fee credits for TSA PreCheck or Global Entry, were typically found on premium cards with three-figure fees.
But now even lower-tier cards, such as the Capital One Venture Rewards Credit Card and the Bank of America® Premium Rewards® credit card, are offering these kinds of perks. Bank of Americas $95-annual-fee premium card even offers up to a $100 airline incidental statement credit annually.
Another great example is the Chase Sapphire Preferred Card. At $95 per year, the newly updated card boasts excellent rewards rates and now offers a $50 annual credit on hotel bookings made through the Ultimate Rewards portal. The annual credit alone covers more than half of the annual fee.
Best For American Delta Or United Loyalists: A No
- United: United Gateway Card
Most airline credit cards worth having come with an annual fee although many of them will waive it for the first year. Those cards tend to come with useful benefits for people who fly with the airline, like priority boarding or free checked bags. You can learn more in our guide to the best airline credit cards.
However, if you’re interested in earning frequent flyer miles with a particular airline through your spending, but don’t care about those perks and want to avoid the fee, you have a couple of options.
Read more: Delta SkyMiles Blue American Express Card review
If you’re a Delta flyer, you can go for the Delta SkyMiles® Blue American Express Card, which offers 2 Delta SkyMiles on every eligible dollar spent with Delta and at restaurants worldwide, and 1 mile per dollar on everything else. It also gets you a 20% discount in the form of a statement credit on Delta inflight purchases like food or drinks.
American loyalists can consider the American Airlines AAdvantage MileUp Card. This card offers 2x AAdvantage miles on every dollar spent at grocery stores and with American Airlines, and 1 mile per dollar on everything else.
United’s United Gateway Card, with an annual fee of $0, earns 2x miles on United purchases, gas, public transit, rideshare services, and taxis, and 1x miles on everything else.
Read more: United Gateway Card review
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