7 Reasons To Acquire and Keep No Annual Fee Credit Cards

by Miles Jackson

I just finished a post on the impact on your credit score from closing credit cards. I felt the logical next step was to provide you with options for those no annual fee cards I mentioned as a great strategy to strengthen your credit scores without costing you in terms of annual expenses. Plus, many of these cards can be downgraded to as well. Here’s seven reasons — in no particular order — why no annual fee cards can make sense and the ones that you could apply for. So we’ll look at what No Annual Fee cards to apply for.

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Builds Your Credit History

You will build a good credit history simply by opening credit accounts and paying them off before they become due each month. This demonstrates that you can handle multiple accounts and are a good credit risk to lenders.

Increases Your Length of Credit

After acquiring a credit account, the length the account is open will be calculated into your length of credit, or average age of accounts. Holding onto these accounts will — over time — improve your credit score as the average age increases. This illustrates to lenders that you are becoming a more stable credit consumer over time. You should be rewarded with a higher credit score.

Keeps Your Credit Utilization Low

If you have several accounts and you are paying these no annual fee credit cards off monthly before their due date, then your credit utilization score will improve. This is because credit reporting is based on when your statement is due. Pay off your bill before the payment is due and it appears as if you have not used that account’s credit limit. Therefore, your utilization goes down and your credit scores go up.

Many Offer Easy To Rack Up Bonus Points

Earn Up to 50,000 Points with Wells Fargo Propel American Express

Just because a credit card has a zero annual fee don’t assume that means it doesn’t offer any special bonus offers. Nope, in fact, many have some great welcome bonuses. For example, one of my newest favorite zero annual fee credit cards is the Wells Fargo Propel American Express Card. It offers up to 50,000 bonus points: Earn 30,000 bonus points when you spend $3,000 on purchases in the first 3 months. Plus, earn an additional 20,000 bonus points when you spend $15,000 on purchases in your first year. In addition, you can earn 3x points on eating out and ordering in; gas, rideshares, and transit, flights, hotels, homestays, and car rentals, and popular streaming services.

Great Flexibility for Category & Bonus Spend

I love the rotating categories each quarter with the Chase Freedom. The card offers 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. That allows me to take advantage of some great rewards at grocery stores (think gift cards) plus gas stations.

Additionally, the Chase Freedom Unlimited currently offers 3% cash back on your first $20,000 spent on purchases in your first year and 1.5% thereafter. Not a bad return for a no annual fee card.

Downgrade From High Annual Fee Cards

It is a popular option to downgrade a high annual fee Chase card to the no-fee Chase Freedom Unlimited and Chase Freedom. Those two can help maintain your credit score over the long term when downgrading (this doesn’t affect your credit score) from a more premium product (like the Chase Sapphire Reserve).

Usually Easier To Be Approved For

That’s because length of credit (how long you have held onto any one account) improves as long as you keep these accounts open. Keeping them open without that annual fee makes it a no-brainer. Some of these no annual-fee cards even offer some good perks.

Here’s a list of no annual fee cards that you should consider to add to your arsenal.

Consider This List Of No Annual Fee Cards To Apply For

Although the information was correct at the time of posting, you should always check the current specific terms when you apply for a specific card.

American Airlines AAdvantage MileUp Card

  • Earn 10,000 American Airlines AAdvantage bonus miles and receive a $50 statement credit after making $500 in purchases within the first 3 months of account opening.
  • Downgrade from Citi AAdvantage Platinum Select

 

American Express Cash Magnet Card (non-affiliate link)

  • Earn a $150 statement credit after you spend $1,000 or more in purchases with your new Card within the first 3 months of Card Membership.
  • Earn 1.5% cash back on every purchase, meaning there is no need to worry about spending categories.

 

Amex EveryDay Credit Card

  • Earn 10,000 Membership Rewards Points after you use your new Card to make $1,000 in purchases in your first 3 months.
  • Use your Card 20 or more times on purchases in a billing period and earn 20% extra points on those purchases less returns and credits.
  • 2x points at US supermarkets on up to $6,000 per year in purchases.

 

Capital One Spark Cash Select for Business

  • Get unlimited 1.5% cash back and you could be putting thousands of dollars back into your business. Redeem at any time with no minimums.
  • Earn a one-time $200 cash bonus once you spend $3,000 on purchases within the first 3 months from account opening.

Capital One Spark Miles Select for Business

  • Earn 1.5 miles per $1 on every purchase
  • Plus, a one-time bonus of 20,000 miles once you spend $3,000 on purchases within 3 months from account opening
  • Miles won’t expire for the life of the account, and there are no categories to limit where or what you buy

 

Capital One VentureOne Rewards Credit Card

  • Earn unlimited 1.25 miles per dollar on every purchase, every day — plus 10x miles on thousands of hotels, through January 2020
  • Earn 20,000 bonus miles once you spend $1,000 on purchases within the first 3 months from account opening

 

Chase Freedom Unlimited

  • Earn 3% cash back on all purchases in your first year up to $20,000 spent.
  • After that, earn 1.5% cash back on all purchases.

Chase Freedom

  • The Chase Freedom earns 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate

Citi Rewards+ Card

  • Earn 15,000 bonus points After you spend $1,000 in purchases with your card within the first 3 months of account opening.

Citi Rewards+ Student Card

  • Earn 2,500 Bonus Points after you spend $500 in purchases with your card within the first 3 months of account opening.

Citi® Double Cash Card

  • The Citi Double Cash card lets you earn 2% cash back — 1% on purchases and an additional 1% as you pay for those purchases.


american express honors cardHilton Honors American Express Card

  • Earn 7X Hilton Honors Bonus Points for each dollar of eligible purchases charged directly with a hotel or resort within the Hilton portfolio.
  • Earn 5X Hilton Honors Bonus Points for each dollar of eligible purchases at U.S. restaurants, U.S. supermarkets, and U.S. gas stations.
  • Earn 3X Hilton Honors Bonus Points for all other eligible purchases on your Card.
  • No Foreign Transaction Fees. Enjoy international travel without additional fees on purchases made abroad.
  • Enjoy complimentary Hilton Honors Silver status with your Card. Plus, spend $20,000 on eligible purchases on your Card in a calendar year and you can earn an upgrade to Hilton Honors Gold status through the end of the next calendar year.
  • No Annual Fee.
  • Terms Apply.
  • See Rates & Fees

 

Ink Business Cash Credit Card

  • $500 bonus cash back after you spend $3,000 on purchases in the first 3 months after account opening.
  • 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year.
  • 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year.
  • 1% cash back on all other purchases–with no limit to the amount you can earn.
  • Redeem your rewards for cash back, gift cards, travel and more through Chase Ultimate Rewards.

 

Ink Business Unlimited Credit Card

  • Earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening
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  • Earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening
  • Earn unlimited 1.5% cash back on every purchase made for your business
  • 0% introductory APR for 12 months on purchases
  • Employee cards at no additional cost

The Blue Business Plus Credit Card from American Express

  • Business owners will also get 0.0% intro APR on purchases and balance transfers for 12 months, then a variable rate,  based on your creditworthiness and other factors as determined at the time of account opening.
  • Get rewarded for business as usual. Earn 2X Membership Rewards points on everyday business purchases such as office supplies or client dinners.
  • Earn 2X Membership Rewards® points on everyday business purchases up to $50,000 with no category restrictions
  • 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter.

Final Thoughts

As you can see, there are many great benefits that come with several fo the best no annual fee cards to apply for today.

Hopefully, this guide will help lead you in the direction that’s best for your credit card strategy!

Which no annual fee cards to are you looking to apply for?

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

2 comments
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2 comments

Sam April 21, 2019 - 8:00 pm

I have so many darn no AF cards that I find it a pain in the neck. Some I barely put $10 spend on a year. Most of the are from downgrading AF cards.

Reply
Miles Jackson April 21, 2019 - 9:01 pm

Sam,

Still these cards are a great way for many people to build their credit scores. Personally I only want to downgrade if it helps me to accomplish a specific goal.

Reply

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