Best No Annual Fee Credit Cards For Everyday Spend

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Credit cards are the primary way I earn points, both through the sign-up bonuses offered through cards, as well as by maximizing my return on everyday spend.

For someone looking for a simple “one size fits all” credit card strategy, I tend to think you’re best off going with one of the flexible sub-$100 annual fee credit cards.

For example, I’d say the four most useful cards with such an annual fee are the following (all of which I have):

  • Chase Sapphire Preferred® Card — Earn double Ultimate Rewards points on dining and travel, plus pay no foreign transaction fees
  • Citi ThankYou® Premier Card — Earn triple ThankYou points on travel (including gas), and double ThankYou points on dining and entertainment, plus pay no foreign transaction fees
  • Amex EveryDay® Preferred Credit Card — Earn triple Membership Rewards points at U.S. supermarkets (on up to $6,000 per year in purchases), and earn double points at U.S. gas stations, plus use your card 30 or more times on purchases in a billing period and get 50% more points
  • Barclaycard Arrival Plus™ World Elite MasterCard® — Earn two miles per dollar spent plus receive a 10% refund on redeemed miles; each point can be redeemed for one cent towards the cost of a travel purchase, meaning you essentially earn a return of ~2.22% on everyday spend; also, the card has no foreign transaction fees, and has true Chip + PIN technology

While I think lots of consumers would be best off going with one of the above moderately priced credit cards, I know a lot of people prefer not to pay an annual fee on a credit card.

With that in mind, what are the best credit cards for those looking to maximize everyday spend without paying an annual fee? I think there are two cards which are especially compelling, which offer a return which I value at ~2%:

Citi® Double Cash Card

It just kills me inside when people use 1% cash back credit cards and think they’re getting a good return. If you just want a straightforward card which doesn’t have an annual fee, it’s tough to beat the Citi® Double Cash Card. It offers 1% cash back when you make a purchase, and 1% cash back when you pay your bill.

Earning the equivalent of 2% cash back after making your payment without paying an annual fee is a fantastic return. And in my opinion a no annual fee card which has this rate of return is what a vast majority of Americans should be putting their spend on.

Citi-DoubleCash

For what it’s worth, there’s another card which offers the equivalent of 2% cash back, the Fidelity Investment Rewards American Express Card. Though I prefer the Citi® Double Cash Card, because MasterCard has wide global acceptance, and there’s no need to open a Fidelity account in order to collect the cash back.

Amex EveryDay® Credit Card

The Amex EveryDay® Credit Card was introduced last year, and represents a very nice new product offering. It’s the only no annual American Express card which accrues “premium” Membership Rewards points, which can be transferred to airline partners.

Not only can you accrue Membership Rewards points without an annual fee, but it actually has a compelling points earnings structure:

  • Earn 2x points at U.S. supermarkets, on up to $6,000 per year in purchases
  • Earn 1X points on other purchases
  • Use your card 20 or more times on purchases in a billing period and get 20% more points on those purchases

EveryDay

So if you make at least 20 purchases per billing cycle you’re earning 1.2 Membership Rewards points per dollar spent, and then on top of that you’re earning bonus points at U.S. supermarkets. I value Membership Rewards points at ~1.8 cents each, so assuming you’re earning 1.2 Membership Rewards points per dollar spent, that’s like a return of ~2.2%.

Now keep in mind that if you spend a good amount on your credit cards each year, it could make sense to use one of the cards I referenced above. Specifically, it could be worth paying the $95 annual fee and getting the Amex EveryDay® Preferred Credit Card instead. It offers a 50% points bonus rather than a 20% points bonus (when making 30 transactions per billing cycle), and offers more bonus points at U.S. supermarkets, and also bonus points at U.S. gas stations.

For more on that, see the previous post I made comparing the EveryDay and EveryDay Preferred products.

Bottom line

A vast majority of people aren’t maximizing their return through credit card spend. Heck, I probably don’t either, as one could certainly argue I over diversify my credit card spend.

With that in mind, the simplest advice is often the best. You can get a return of ~2% on a credit card with no annual fee. So if you or your family prefer a card without an annual fee, I think the Citi® Double Cash Card and Amex EveryDay® Credit Card are seriously worth considering.

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Comments

  1. My current card usage breakdown:

    CSP: Travel
    Freedom: Restaurants (until July 1)
    SPG: All other non-bonused spend
    Delta Platinum: Delta purchases, MS to get MQM boost

    Thinking about adding a card for gas, but the Freedom gives 5x points during the summer, and there aren’t any non-annual fee points cards that offer a bonus. I don’t spend enough on groceries to justify the Everyday, and I only have one one free Amex card slot left anyway.

  2. @ William — Have you thought of adding the Citi ThankYou Premier? You get triple points on gas, no annual fee the first year, and a great sign-up bonus. Perhaps not a long term solution, but at least in the short term sounds like it would nicely complement your current portfolio.

  3. Got a question on the “churning” your cards……….do you cancel cards after you get the points in order to avoid the annual fee? Obviously this would be on cards that waive them the first yr. Thanks 🙂

  4. Credit cards that charge foreign transaction fees cannot be “best of” anything. They screw you, and readers of this blog usually go to Mexico, Canada, the Caribbean, etc.

    A “best of” card is one you don’t have to think what country you’re in to be able to use it. The others may be “decent”, but never “best”.

  5. @Lucky

    I’ve thought about it, but TY points don’t transfer to any airlines that I fly. The Freedom’s 5x bonus is better than the Premier’s 3x, and I’m not sure that I’d spend enough on gas to justify a card with an annual fee. Still, I have one more inquiry allotted for the summer, so I might take a closer look at it, especially with the nice signup bonus.

  6. Ben – Any thoughts on any of the Discover products? I’ve never held any of their cards and know acceptance abroad is probably an issue.

  7. Ben: any point in my going through ANY of the links? You always title your monthly article “Best No Annual Fee Credit Cards For Everyday Spend”, and I (and, I’m sure, lots of others from our global village) repeatedly click in the links, only to find that they require a USA Social Security Number.

    Could you clarify this in the title, if necessary qualifying by adding ‘Available Only to USA Residents,’ if that is the case? I would imagine you’d be aware of this restriction if you’ve checked out all the cards (I presume you have, since you’re providing these suggestions as “The Best”)
    This simple clarification would save a hell of a lot of your readers a hell of a lot of frustration and wasted time!

    Thanks

  8. @ Mick — Will try to include that in posts going forward, but you can assume that if I’m talking about credit cards they’re US only, unless otherwise stated. Sorry for the confusion.

  9. @ AlexS — I can’t say there are any Discover Cards which I think are competitive with the top cards issued by other banks.

  10. @ William — Hmmm, which airlines do you fly? Keep in mind even if they don’t directly partner with airlines you fly, chances are they partner with an airline which partners with an airline you fly. 😉

  11. @ John Tarik — It all depends who you are. There are plenty of people who have never left the US/don’t have a passport.

  12. @ James — For the most part I keep these cards long term, at least the ones mentioned in this post. They offer me enough value year after year that it justifies the annual fee for me.

  13. Thanks, Ben, and thanks for the work you put into the blog, despite some of the flames you get (including the several that I contribute 🙂 )

  14. Fidelity Investment Rewards at a straight 2% cashback and no annual fee is a no-brainer if you are a Fidelity customer.

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