When the CARD Act of 2009 became law, many pundits believed that every credit card would soon have an annual fee – because greedy banks would try to make up for profits they had to give up elsewhere. Well, it didn’t quite work out that way.
Credit cards remain a highly profitable line of business, and there are still plenty of cards being offered with no annual fee. So if you are looking for a great credit card, with no annual fee, check out these top selections:
This little-known Louisiana-based bank leads the way by offering the lowest interest rate on the market. Cardholders enjoy a standard APR equal to the prime rate plus only 4 percent – so as of right now, that’s 7.25 percent (because the current prime rate is 3.25 percent).
The catch – and there always is one, isn’t there? – is that this low rate is only available to applicants with excellent credit.
PenFed is short for the Pentagon Federal Credit Union, which was founded to provide financial services to our armed forces. But membership is now available to anyone. If you don’t have a relative or even roommate who qualifies, you can buy your way in – by making a one-time donation of $20 to the National Military Family Association or $15 to Voices for America’s Troops.
While none of PenFed’s credit cards charges an annual fee, my favorite is the PenFed Platinum Rewards Card. Cardholders earn 5 points per dollar spent on gas, 3 points per dollar charged at grocery stores, and 1 point per dollar on all other purchases. Points can be redeemed for 1 cent each toward prepaid Visa cards or other merchandise options. Finally, there are no foreign transaction fees on any of their cards – and we hate those fees.
With 2 percent cash back, this card is the market leader when it comes to cash-back rewards on all purchases. Each month, your rewards are deposited into your Fidelity IRA, Fidelity-Managed 529 account, brokerage account, cash management account, or any other eligible Fidelity account.
Fidelity is currently offering a zero-percent introductory APR for seven months on balance transfers, but with a 4 percent balance transfer fee.
Nearly all leading travel-reward credit cards charge an annual fee – with the notable exception of the Hilton HHonors Visa Signature Card.
It offers 40,000 bonus points after your first $750 in purchases, as well as 6 points per dollar spent at Hilton properties, grocery stores, drugstores, gas stations, wireless and home phone, Internet, cable, and satellite TV service providers. Three HHonors points are earned for each dollar charged everywhere else.
As few as 7,500 points can be redeemed for free nights at Hilton brands, including Embassy Suites, Doubletree, and Hampton Inn. A free night at their Waldorf Astoria hotels will set you back 50,000 to 60,000 points.
5. Chase Slate
This Chase product distinguishes itself in two ways. First, it features the unique Blueprint program, which allows customers to reduce their interest payments by paying some charges in full while carrying a balance on others. Blueprint also includes powerful budgeting and goal setting features.
Secondly, Chase is currently offering this card with a 15-month, zero-percent promotional APR on balance transfers – but with no balance transfer fee. There are currently only two cards on the market that offer zero-percent rates on balance transfers with no fees. This one is the clear leader.
Which card is right for you?
Although it’s always better to pay your credit card statement in full rather than carry a balance, the Iberia Visa Classic and the Chase Slate are the best for those who tend to do so anyway.
Those who never carry credit card debt and are looking for cash-back rewards should choose between the Fidelity and PenFed cards, depending on how your spending habits will maximize their rewards.
Finally, those who prefer to earn travel rewards, such as a night at the Waldorf Astoria, should consider the Hilton HHonors card. Finally, keep in mind that there are some credit cards with high annual fees that are actually good for you.