Best Rewards Credit Cards With No Annual Fee October 2024

What is a cash-back credit card?

Cash-back credit cards give cardholders a portion of their spending back in the form of rewards. Typically based on a percentage back, these rewards incentivize customers to use cash-back credit cards when making both small and large purchases.

Rewards accumulate over time and are typically redeemable through statement credits, gift cards and shopping points. Although, each issuer has its own redemption policy.

These cash-back credit cards with no annual fee sometimes come with special promotions, such as welcome bonuses and memberships to subscription services like streaming and food delivery companies.

While these options work great for regular and budget-conscious spenders alike, they also make a great choice for those seeking straightforward rewards and strategic spenders who want the most bang for their buck.

Types of cash back credit cards

If you’re looking for the highest cash-back credit card with no annual fee, there’s no one-size-fits-all option.

These credit cards come with diverse terms, each tailored to different lifestyles and spending habits. Knowing the types of cash-back credit cards you’re likely to encounter in your search helps you choose one that best fits your needs.

Look for a cash-back credit card with no annual fee that aligns with how you shop. The best credit card should let you maximize the rewards you earn on purchases, whether you shop frequently in specific categories, want consistency and simplicity or wish to shake it up with varying offers.

Let’s look at the types of cash reward credit cards with no annual fee to see which one works best for you:

• Flat-rate: Flat-rate cash-back cards give you a percentage of your purchases regardless of the category. For example, a credit card might provide 2% back every time you spend money on it, whether for groceries, gas or a hotel room. The simplicity of a flat-rate rewards program makes these credit cards a good choice if you want a straightforward payout without tracking spending categories.
• Tiered cash back: Tiered cash back credit cards provide structured rewards, depending on the purchase category. For instance, you might get 3% back on gas, 2% back on groceries and 1% back on all other eligible purchases. This type is the best rewards credit card if you consistently spend in higher-reward categories, but you often have to pay attention to maximize the benefits.
• Rotating categories: Cash reward credit cards that use rotating categories deliver higher rewards for specific purchase categories, which change every quarter. Cardholders must usually activate these offers, and they typically have caps on the number of rewards you earn at the higher rate. If you’re willing to track changes and align your spending, this type may be the best card for you.

What does no annual fee on a cash-back rewards card mean?

The best cash-back cards have no annual fee, meaning you don’t have to pay a yearly charge to use it or its benefits. Appealing to customers who pay close attention to their spending, no annual-fee credit cards reduce the cost of cardholding, and when these options have rewards attached — even better!

Not having a fee to pay every year makes it easier to profit from the rewards. Users earn cash rewards on their spending, with no extra fees cutting into what they earn. For instance, if you earn $250 cash back over a year, but you have a $200 annual fee, you’re only getting $50 back.

Credit cards with no annual fee and cash back make a great choice when you want a low-maintenance approach to rewards programs. They also work well when you don’t spend enough to justify using a card with a high annual fee, even when it offers higher rewards.

Budget-conscious customers often find these options a cost-effective way to earn rewards on everyday spending, without incurring extra costs for the privilege of using the card.

How to redeem rewards from cash-back credit cards

The best personal and business cash-back cards with no annual fee have various ways to redeem rewards. For example, some cards let you purchase gift cards, make direct deposit payments and even buy merchandise by using rewards points.

Some cards let you shop with your points at stores like Amazon, while others still let you use your points for PayPal purchases. Only some offer cash back in the form of statement credits, which help reduce the amount you owe on your credit card.

Pros and cons of cash-back credit cards with no annual fee

Cash-back credit cards with no annual fee let you earn rewards on your spending, whether you’re making planned or everyday purchases. Like any financial tool, however, they have certain advantages and disadvantages, depending on the individual consumer.

Knowing what to look for helps you make better decisions over time and assists you in optimizing your credit card usage. These pros and cons help weigh the potential benefits against the drawbacks when choosing the best rewards credit card with no annual fee.

How to choose the best cash-back rewards card with no annual fee

Consider these key factors when you’re deciding on the best cash-back rewards card with no annual fee for your needs:

Identify your primary spending categories

The first step in picking the right cash-back card is figuring out where you spend the most money. For example, if you eat out a lot, look for a card providing a high reward rate for money spent on dining at restaurants. Likewise, if you travel, you can maximize your earnings with a travel rewards card that pays you back high percentages for flights and hotels.

▶︎ See our picks: Best credit cards for restaurants

Consider your redemption options

Next, look at how easy it is to redeem your cash-back rewards. Some cards let you spend points in their online shops, while others let you spend points at online stores like Amazon or by paying via PayPal. Other options may cut you a check or provide a statement credit for your cash-back rewards.

Be sure to check out the expiration dates for your rewards. Some cards require you to cash out regularly, while others let you accumulate rewards for as long as you have an account in good standing.

Examine the interest rates and other fees

While you may get a great percentage back on purchases, other fees charged by the cash-back rewards card may not be as enticing.

Before you commit to a rewards credit card with no annual fee, be sure to check out other fees associated with use. These include fees for transferring your balance, making foreign transactions and taking out a cash advance. Other charges may include high late fees and larger-than-average APRs.

Consider other important benefits

Depending on your needs, there may be other important benefits you need or are missing out on with your cash-rewards card. For instance, if you travel a lot, you may want a card that provides travel protection and TSA/Global Entry benefits.

If you shop a lot, purchase protection may be an attractive option, while credit-building tools may be desirable if you’re looking for ways to boost your credit score.

Compare cards with no annual fee vs. cards with an annual fee

If you’re someone who spends a lot, a card with an annual fee may still pay more in rewards than one without the annual fee. That’s because cards with an annual fee often offer higher reward rates and more benefits than options with no annual fees.

▶︎  For an example of this, see: Blue Cash Preferred^® Card from American Express vs Blue Cash Everyday

How to apply for a rewards credit card with no annual fee

Applying for a cash-back credit card works like applying for any other card. The credit scores required to qualify, however, are often higher. Even with a lower credit score, some rewards credit cards with no annual fees are still available. As with other credit cards, you need your name, address and social security number to apply online.

How can I improve my chances of getting approved for a cash-back rewards card with no annual fee?

Researching cash-back rewards cards that fit your preferences and credit score helps improve your chances of getting approved. Look at banks that let you prequalify for a card before you apply without a hard pull on your credit.

Alternatively, if you’re unsure your credit score is high enough, consider applying with a cosigner to get you the rewards credit card with no annual fee that you want.

How to maximize the benefits

Making the most out of your cash-back credit card with no annual fee is essential to ensure you receive all its perks.

Here are some easy ways to maximize your credit card’s benefits:

1. Pay off your rewards credit card every month: This helps you get the set percentage back without paying interest on your purchases.
2. Plan larger purchases ahead of time: This lets you pick which credit card in your wallet will provide the most cash-back for the purchase.
3. Pick from rotating spending categories: This allows you to get the most rewards for your spending habits.

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^{For rates and fees of the Blue Cash Everyday® Card from American Express, please visit this page.}