Credit Cards With No Annual Fees

Written by Jared Vincenti
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When you make a purchase with a credit card, the credit card company pays for your purchase and you pay them back later. The way that credit card companies make money is by charging interest on the outstanding balance that you owe them. This Annual Percentage Rate (APR) varies from card to card, but is the creditor's primary source of income.

Some cards also charge an annual fee on top of the APR. This is a flat charge decided upon when the card is issued, and is either paid in one lump sum or is broken up into monthly increments. Annual fees are usually charged on cards that have a very low APRs or are otherwise attractive to potential customers.

Avoiding Annual Fees

It's actually quite easy to get a credit card with no annual fee. As the many credit card companies compete for your business, they offer rewards, lower APRs, and do away with annual fees. Getting rid of the annual fee is not a huge sacrifice for the company, and it lets the cardholder save a few hundred dollars a year.

Usually, you will only find annual fees on very high-level credit cards. These are reserved for people with good credit (and presumably, a lot of money). Offering large rewards, a low APR, and sometimes even no credit limit, these cards will have an annual fee to compensate for the other perks of the card. If you are applying for a run-of-the-mill credit card, you should look for one with no annual fee--unless the card with the annual fee also has a very low APR. In this case, you should compare how much you'd save in interest and compare it to how much you'll be paying in annual fees.


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