You need to pay an annual fee with regular credit cards. The fee can be close to or over $100. On the other hand, you don’t have to pay the annual fee on a credit card with no annual fees. The rewards on these cards might not be as attractive as they are on other credit cards, but the non-existent annual fee is the biggest benefit.

If you have not already heard about them, here is your chance to learn the great benefits of this type of a credit card:

No Annual Fee vs. Fee-Based Credit Cards

As mentioned earlier and is clear from the name, this is the type of credit card where you don't have to pay the annual fee for carrying the card. The banks were able to attract customers to cards with associated annual fees by offering rewards on them, also known as rewards credit cards. So, when you purchase something with your regular credit card, you earn some points, and these points help you save money in the future. If you notice carefully, you will realize that not only do these rewards lure you into getting fee-based cards but also encourage you to spend more. We encourage you to learn more about credit card interest fees.

On the contrary, banks made no annual fee credit cards less attractive by taking away the rewards. You can conclude from here that a fee-based card is best for people who shop very often. Since they are always buying something, they can collect a lot of reward points and benefit from them later. However, if you are very selective with your purchases with a credit card, a card with no annual fee is the best route for you to go on.

Do You Get Rewards with No Annual Fee Credit Cards?

A straight answer to the question is yes. There are credit cards without annual fees that have rewards on them. The only drawback is that those rewards are not as attractive as the rewards you get with fee-based cards. You might have to do a lot of shopping or continue to shop for several months before you can collect significant reward points.

No Annual Fee Credit Cards in Canada

Most Canadian banks will push fee-based credit cards on you. They want you to pay fees because they love fees. On the other hand, you as a consumer must hate fees. When you do your research, always compare the value of the card, i.e., the value of rewards against the annual fee and whether or not it's worth paying the annual fee. If your calculation shows the rewards are bigger than the annual fee, go for a fee-based credit card without any hesitation. However, for those who do not want to pay any fees on their credit cards, please continue to read.

The Best Options Available to You

From close to a dozen of credit cards with no annual fees in Canada here are the three best.

1. MBNA Rewards MasterCard

MBNA Rewards Mastercard®

19.99%
No Annual Fee
5,000 bonus MBNA Rewards points
Get a $50 gift card from CompareMyRates.ca upon approval

The best thing about this card from MBNA is that there is no limit on the rewards points you gain on it. The major reward with this card is 1% cash back on the purchases you make. It even has insurance coverage, and it will not be wrong to say that it beats most other no annual fee credit cards in that department. Most other cards have a lot of restrictions on how you can cash your rewards, but this one is unbelievably flexible with those rules. Here are the top reasons to get MBNA rewards MasterCard.

  • You earn one reward point for every dollar you spend.
  • You can redeem earned points on the phone or online.
  • There is no restriction on when you can redeem your points.
  • There are many ways to redeem points, e.g., travel, bank deposit, charity, check, etc.
  • There is coverage for car rental theft.
  • Traveling accidents covered for up to $1 million.
  • One year extended the warranty.
  • You get protection on purchase for up to 3 months.

2.      American Express Simply Cash Card

SimplyCash Card from American Express

19.99%
No Annual Fee
5% Cashback & 1.99% Balance Transfer for first 6 months

If you don't want to deal with complexities of credit cards and want a simple solution for your shopping, this is the card for you. This American Express card beats the cash back offer of MBNA rewards MasterCard by offering you 1.25% for every purchase you make using this card. When you get the card, you will be able to purchase grocery and gas with a 5% bonus for half a year. However, there is a cap of maximum $250 on this particular offer. However, being able to earn up to $250 in just six months is quite an offer on a card that has no annual fees on it. Here are the things that make this card one of the best.

  • The 1.25% cash back offer is the most generous in the no annual fee credit card world. We even have some tips on how to maximize your cash-back credit card awards.
  • You can earn as much cash back as possible since there is no cap on it.
  • Balance transfers have an interest rate of only 1.99% for the first half of the year.
  • Front of the Line advantage on ticket purchases.
  • First 6 months have a capped $250 bonus when you purchase gas and grocery.

3.      PC Financial World Elite MasterCard

If you like to visit stores owned by Loblaw and shop at the supermarkets, this is going to be your favorite no annual fee credit card. To make the best of this card, you have to visit Loblaw stores and some other authorized retailers on its list such as PC Travel, Esso and Shoppers Drug Mart. When you purchase something from these stores with PC Financial World Elite MasterCard, you earn 30 points for every dollar you spend. These 30 points translate to 3% of your money back into your pocket on your total expenditure. Here are the best things about this card.

  • Best for people who like to shop at stores mentioned above.
  • People who shop at other stores will still get 10 points for every dollar spent.
  • You are given 20,000 points welcome bonus when you get the card for the first time, which means $20 worth of free shopping.
  • Purchase protection of 90 days and extended warranty for a year.
  • Concierge customer service, so you are served like a special customer every time.

no annual fee credit card

How to Make the Most of No Annual Fee Credit Cards

Use these tips to get maximum benefits from the cards mentioned above and any other no annual fee credit cards.

  • Get your hands on multiple cards, e.g., use Simply Cash Card from American Express to do your regular shopping but carry PC Financial World Elite MasterCard when going to Loblaw stores.
  • Pick the cards that meet your requirements the best. For example, if you are on a low income, the MBNA rewards MasterCard, and the Simply Cash Card from American Express are the best options for you.
  • If you don't want restrictions and regulations tied to your cash back rewards, you should go for MBNA cards.
  • Learn more about how cash back rewards on credit cards work and how to make the most of cash back rewards. Although no annual fees credit cards don't focus much on the rewards, if you know how the reward points work and how you can maximize them, you will get the best of both worlds.

You are highly recommended to research other no annual fee credit cards before you make a decision. However, the three cards mentioned above have the best value to offer to their customers.

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