Stop paying annual fees: Compare credit cards with $0 and low annual fees
No Annual Fee Credit Card Offer
The HSBC Platinum Credit Card is a rewards credit card with the ability to earn 1.000 point per dollar on your spend. You'll get $0 p.a. annual fee for the life of the credit card.
- 0% p.a. balance transfer for 8 months on application from non-HSBC credit cards (reverting to the cash advance rate of 21.99% p.a. and subject to change)
- $0 p.a. annual fee for the life of the credit card
- Up to 55 days interest free on purchases3 when you pay the full balance (including any balance transfers, promotional purchases and the 0% p.a. balance transfer offer above)
- An ongoing variable purchase interest rate of 19.99% p.a.
No Annual Fee Credit Card ComparisonRates last updated March 4th, 2015
What is a no annual fee credit card?
A no annual fee credit card is a no annual fee credit card that waives this charge. Whilst this may seem like a no-brainer for the consumer, this type of credit card is not suitable for everyone. No annual fee credit cards can suit to those people who reserve the use of their credit card for emergencies, or who make regular purchases on them but always completely clear their balance each month – this is because it is often the case that the interest rate on purchases with no annual fee credit cards is on the higher side. Savings on the annual fee will be quickly negated by higher interest charges if the balance is not cleared in full each month. If you occasionally rack up interest, you’ll end up paying more on a no annual fee card than a regular low rate credit card with an annual fee.
The no annual fee on credit cards can come in 2 forms:
- No annual fee for the first year - This is an offer that comes with some credit cards, where the annual fee is removed for the first year after application. It is important to be weary of the following years annual fee, are the features of the card worth the first years discount?
- No annual fee for life - This credit card comes with no annual fee for the entire time the credit card account remains active.
Types of credit cards that don’t charge an annual fee
- No annual fee + balance transfer
- No annual fee + rewards
- No annual fee + frequent flyer
- No annual fee + no foreign transaction fees
- Have a no-cost way of paying down your debt
- These cards have no annual fees plus a balance transfer offer
Why should you get one of these cards?
- Pay 0% p.a. interest on your debt – If you have existing credit, store or charge card debt, you can bring this debt over to a new card and pay 0% p.a. interest for an extended period of time. Some cards let you balance transfer personal loans and other credit accounts, too. Get in control of your repayments and pay down your debt without incurring interest.
- Don’t pay anything extra while you’re getting your debt under control - When it comes to paying off a debt you want to give yourself the best chance possible at paying it off, and that’s where keeping your costs low helps. With no annual fee, you won’t have any ongoing costs to maintain except for your repayments.
- After you pay back your debt, the card is a low-cost line of credit - A no annual fee card can offer you a convenient line of credit once your balance transfer if paid off. Check to see how competitive the standard rates on the card are to see if it will work for you as an ongoing way to spend.
Compare no annual fee balance transfer cards
Rates last updated March 4th, 2015
- Why not be rewarded — for nothing?
- These cards have no annual fees plus the ability to earn rewards points
The benefits are obvious, so what are the things you need to watch out for?
- What rewards program is it linked to? Does this program offer rewards that you’re interested in redeeming? For example, is it a travel-focused program but you don’t travel often? Does it require you to spend at certain places to earn points? Ensure you are familiar with the program so you opt into something you want to be a part of and will find benefits from.
- Is the earn rate competitive? The amount of money you have to spend to earn points will affect the ease at which you earn rewards, so ensure the earn rate compares well to other similar cards. You might find a dual account card, where you have two cards linked to the same account with two different earn rates, a good option as it allows you to tailor the way you spend and earn rewards.
- What other costs are associated with the card? There may be no annual fee, bu there is sure to be other costs associated with the card. Apart from the card’s standard rates, including purchase rate, balance transfer rate and cash advance rate, see if there are any other fees involved. These might be rewards program joining fees and other standard fees for late payments and the like.
Comparison of no annual fee cards with rewards
Rates last updated March 4th, 2015
- Why not earn frequent flyer points and at the same time save on annual fees
- These cards offer no annual fees while allowing you to earn frequent flyer points
What features should you look for in a no annual fee frequent flyer card?
- Interest rates and other fees - Frequent flyer cards tend to come with less competitive rates than other standard credit cards, so ensure the rates aren’t too high when compared to other similar products. Also, while these are no annual fee products, other fees may be involved. Check to see if there are fees to join the rewards program or any other ongoing fees associated with the card or rewards account.
- Direct and indirect earn cards - Does your card allow you to directly earn frequent flyer points, or will your points be transferred from a standalone rewards program? Keep in mind that the latter may mean the transfer rate sees some of your rewards points lost, so check what the rate is and if the amount of points you earn and transfer are still competitive.
- Frequent flyer points - What is the earn rate on your card and is it easy to earn points? Does your card have a cap on the amount of points you’re able to earn and do your rewards points expire? Also, are you eligible for bonus points or a higher points earn rate when spending on certain products and services? These are things you need to be aware of.
- Extra features - Some of these cards offer you additional features, such as complimentary insurances, promotional rates on purchases balance transfers and even complimentary airport lounge passes. See what’s possible with these cards and how it can benefit you.
Compare no annual fee frequent flyer cards
Rates last updated March 4th, 2015
- How does a free line of credit for your world travels sound?
- These are cards with no annual fees plus no foreign transaction fees
What you need to know about these credit cards
- What foreign transaction fees might apply? There are a few fees that fall under the ‘foreign transaction fee’ umbrella, so you need to ensure all are $0 and 0% p.a. The fees you need to check are foreign currency conversion fees, which are the fees that are charged, normally represented as a percentage, that you’ll be charged when you make a purchase in another currency. Other fees include overseas ATM withdrawal fees and also overseas cash advance fees.
- What other features come with the card? Do you have any other features that you want from your credit card? Rewards points, travel insurance, purchase protection and other premium features can all be yours, depending on the card you choose.
- Is the card competitively priced? What will you be paying in interest when you don’t pay back your balance in full? Does the card offer any promotional rates for purchases or balance transfers? Look at how much the card will cost you to own — as a no annual fee product, it shouldn’t cost you much.
A comparison of no annual fee cards with no foreign transaction fees
Rates last updated March 4th, 2015
Which is the best no annual fee credit card?
‘Best’ is much about which card will be the best fit for you. Credit cards are a bit like shoes. They aren’t one-size-fits-all products. There are some more or less suited to your needs and intended purpose. While some cards may have stronger particular features, such as lower purchase interest rates, longer 0% balance transfer periods and so forth, it is up to you to discover which combination of features — or lack thereof — works best for your financial needs.
Before you apply, consider:
- No interest-free days - Any credit card which doesn’t have interest-free days is going to cost you in interest — irrespective of whether you pay your balance in full each month. As, on these cards, interest accrues from the day of each purchase. You’d save far more money by selecting a credit card with the usual 55 days interest-free.
- Carrying a balance - If you don’t pay your credit card balance in full each month, you don’t get interest-free days. That is why most cards will say, ‘up to 55 days interest-free’. Carrying a balance increases your exposure to the ways interest can be applied to your credit card usage.
- Thinking you’re earning the most possible rewards - No annual fee credit cards don’t earn as many rewards points per dollar spent as the best performers on the market, so if you are a rewards junkie you may be looking in the wrong place.
Benefits and drawbacks of these cards
- Save money on annual fees
- Good for infrequent credit card users who repay their balance in full
- Some still come with offers and rewards you’d expect to pay for
- Higher ongoing interest rates
- As with many credit cards, the late payment fees can be quite steep
- Less features and rewards than paid equivalents
How do no annual fee credit cards work?
No annual fee credit cards work on the basis of a trimmed-down rewards offering and higher rates on interest; in an attempt to cut down on costs and try to make up the income gap respectively. Essentially, no annual fee credit cards can save the financially prudent consumer some money. Where they bite back however is with higher interest rates and less attractive rewards programs. Essentially, a credit card without an annual fee is a basic credit card. Many credit cards carry high credit cards large annual fees, such as Platinum credit cards, which can cost as much as $900 a year. If you want to escape that fee madness, a no annual fee credit card can be a nice refuge.
How do you compare credit cards with no annual fee?
- Annual fee - Check whether the absence of an annual fee is applicable for the first year or an ongoing deal.
- Interest rate - When looking at the interest rate, check the purchase rate of interest and the cash advance rate of interest. Remember that too many interest will outweigh the benefits of having no annual fee anyway.
- Interest-free days - Most credit cards come with a 55 days interest-free credit on purchases to help you save money. Remember that this usually applies when you’ve paid your balance in full every statement period.
- Balance transfer rate offered - This is applicable to all new customers who are looking for a way to consolidate and pay off their existing credit card debt. The balance transfer rate and period offered can help you repay debt.
- Purchase rate offered - A low or 0% purchase rate on your new credit card gives you the chance to save some money while still having an outstanding balance. This comes in handy when you need to make large purchases.
- Late payment penalties - Check the penalties and fees that are charged in the case of any late or missed payments. It is also important to keep in mind that if you do not pay off your balance in full each month, your card ends up accruing more interest on the unpaid amount, which will cancel out the benefit of no annual fee.
Are annual fees important?
When you are making a comparison between two credit cards, you will be looking for the difference in features they both offer, including their annual fees. Interest rates are a very important factor if you are planning on making any purchases or doing a balance transfer. In practice, annual fees are underrated as a factor and tend to be overlooked in favour of other card characteristics, such as rewards offerings. In our experience, an annual fee should be an integral factor which determines the suitability of a card. In the end, the suitability of a credit card should be determined on what gives the customer the most financial value at the lowest financial cost — which is why no annual fee credit card offers are compelling and worth considering.
When they are important
- If the only discernable difference between two suitable credit cards is the annual fee.
- If the trade-off on interest rates and features still swings in the balance of a low annual fee.
When they are not important
- When you’ll save more money with another offer even after the annual fee.
- If you know that no matter what the annual fee is, you’ll be able to get value above the annual fee in rewards points with another offer.
Keep in mind the reason why you chose to avoid an annual fee in the first place
You should ask yourself: Are you planning on using a no annual fee credit card? namely, because you wanted to avoid all costs associated with your credit card. Customers who spend within their means to repay the balance in full each month will get the most value from no annual fee credit cards. If your financial personality is conservative and controlled with your money, these cards could suit.
To help you decide if a no annual fee credit card is right for you, these are the best reasons for choosing one:
- Emergencies only - This is probably the best reason to go for a no annual fee credit card. If it is rarely or never going to be used over the course of the year because you prefer to use cash or debit cards, then you should avoid paying an annual fee on your credit card and it shouldn’t really bother you what else is or isn’t included.
- You clear your balance every month - This has been discussed at some length already. If you are not going to pay interest on an unpaid balance, then a higher interest rate is neither here nor there if it means you avoid paying an annual fee.
- You are debt-averse - If you are one of those people who simply will not let themselves fall into debt, then a no annual fee credit card may suit you very well. This does not mean you won’t spend on your card, or that you’re always in a financial position to pay off your bill in full each month; it just means that your attitude to debt is so anti that you will not risk the possibility of debt occurring and will choose to play it safe and keep your card in the dark rather than hand it over for a payment that might cause a problem.
FAQ about no annual fee credit cards
Your most Frequently Asked Questions are answered below. If there are any questions you’d like answered, please leave a comment below or use our live chat service.
Will I ever have to pay an annual fee with a no annual fee card?
No, not if you use a ‘no annual fee for life’ style of no annual fee credit card. Be aware however that some cards waive the annual fee for the first year only.
How are these cards able to offer no annual fees while others do?
One thing you’ll notice is that the interest rates on no annual fee credit cards are usually slightly higher than annual fee cards and the rewards programs are less generous. But, because you’ve not forked out any annual fee, you don’t have to play catch-up to come out on top of the deal.
If you pay your balance in full each month and make no cash advance payments — you can readily come out on top, which isn’t always the case with many credit cards. Some rewards cards for example can require $20,000 of purchases to be made on the card before the value of rewards points equal the cost of the annual fee.
With a no annual fee credit card, customers get a head start.
Are there any other hidden fees that make up for the free cost?
No. Although there are often higher interest rates, these can be avoided by paying your balance in full each month. There are also the normal fees you’d expect with credit cards that can be costly, such as late payment fees.
What is meant by ‘the life of the card’?
‘The life of the card’ is for as long as the cardholder holds the original credit card account.
Can I get a card that charges no annual fee, interest or charges if I don’t use the card?
Yes, this is what no annual fee credit cards are all about. They don’t charge you money if you don’t use the card which is perfect for infrequent credit card users.
Do rewards points come with no annual fee cards?
Yes. Some, but not all, no annual fee credit cards come with rewards points which can be used to redeem some exciting benefits such as flights, gifts, vouchers and shopping discounts.
Can I get complimentary overseas travel insurance on a no annual fee credit card?
Yes, some cards offer this great money saving feature. Usually this cover is triggered by paying for part or all of the trip on your card. See your card’s terms and conditions for details.
Do ‘no annual fee credit cards’ have the same security features as others?
Yes, credit card security features come as standard according to the various similar schemes from Visa, MasterCard and American Express.