There's a growing number of cards that provide generous rewards without the burden of an annual fee.
You have undoubtedly heard the saying that nothing in life is free. I suppose it is usually true in one way or another, but sometimes it is just flat-out wrong. For deal-savvy people, some things can actually be 100 percent free, and, believe it or not, this applies to the world of rewards credit cards.
There is a growing number of credit cards that give you very good rewards for the money you spend using them for daily purchases, without charging an annual fee. Assuming you pay your balance off monthly and avoid interest, late-payment fees and the like, that is truly getting something for nothing.
Some of these annual-fee-free rewards cards even earn pretty valuable points you can use in a variety of ways or simply receive cash back. No matter what your rewards currency preference is, you might be surprised what an annual-fee-free card can get you these days.
Earn 2 percent back on Citi Double Cash Card
This brand-new credit card gives you 1 percent cash back on purchases plus gives you another 1 percent back as you pay for your purchases, whether it is in the same month or over time. This equates to 2 percent cash back for your purchases with no caps, rotating categories or points programs to worry about.
This card just set the new standard for cash-back rewards in a card without an annual fee.
Earn 5 percent back or 5x points on Chase Freedom and Discover it
The Chase Freedom and Discover it cards both operate in similar manners, with capped rotating 5 percent bonus categories each quarter. These bonus categories have included places like restaurants, gas stations, home improvement stores, department stores, and even Amazon.com.
Being able to get 5 percent cash back (up to a $1,500 quarterly max) is very generous for a cash-back card, and with the Chase Freedom, the points earned can be transferred to hotel and airline programs at a 1-to-1 ratio if you also have one of Chase’s more premium rewards card products, such as the Chase Sapphire Preferred. If you don’t have one of those premium cards, which do carry an annual fee, you can still just smile with your 5 percent cash back.
Earn extra points for frequent use of AmEx EveryDay Credit Card
Another annual-fee-free card that came out this year is the American Express EveryDay Credit Card, which awards points not just for everyday use, but it gives you two points for every $1 spent at grocery stores and then awards a 20 percent bonus on all points earned for the month if you use the card 20 times or more in a billing cycle.
This is the only card out there that gives you bonus points not just based on how much you charge to the card, but also based on how frequently you use the card. This makes it pretty handy for busy folks with lots of little errands to run throughout the day.
The other thing I personally love about this card is that the membership reward points it earns are fully transferable to hotel and airline partners such as Hilton, Delta and British Airways without you having to hold any additional card. This is another first in the annual-fee-free rewards card arena.
Up to 5 percent cash back for small businesses on Chase Ink Cash
It’s not just personal credit cards that can pay out big rewards without annual fees, but small-business credit cards can do the same. One example is the Chase Ink Cash, which pays 5 percent cash back at office supply stores and on landline, Internet, and wireless phone charges. It also pays 2 percent cash back on gas and restaurants, and 1 percent on other charges.
The bonus points are capped at the first $25,000 spent in those categories per year, but that is a lot of cash back considering there is no annual fee for the main account, plus additional employee cards are also free.
I think that some rewards cards that have annual fees more than make up for the fees they charge with very good rewards and annual perks such as a free hotel night. But not everyone wants to be saddled with an annual fee each year, and as you can see, there are plenty of very solid options without an annual fee out there.
As always, remember that rewards earned on credit cards are only worth it if you aren’t racking up interest charges or spending more than you otherwise would with cash.