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Does It Make Sense To Pay an Annual Fee for a Credit Card?

Does It Make Sense To Pay an Annual Fee for a Credit Card?
Geri is a highly accomplished freelance journalist and writer, focusing on technology, finance, and marketing.

If you are considering to apply for a new credit card, one of the facts to consider and to be noted is that certain cards do charge yearly fees. Many Canadians will reject these automatically and with great consideration, but what is next? Let us see what does and does not make sense regarding paying an annual fee for a credit card.

When do we choose a credit card with no fee?

A no fee credit card has many obvious benefits – there is no need for you to pay for holding this type of credit card, so on your behalf there is no outgoing expense. Certain scenarios when this makes sense is when you just intend usage of your card for some emergencies, or when you want to build credit history too; when primary goal in credit card use is not the reward you get back. Another such occasion when it is smart to get credit card of no yearly fee is when you spend a little every month to get enough rewards for the breakeven opposed to cost of yearly fee. In such cases, the no fee credit card represents saving of approximately $99 to $120 yearly. Still, opting for a no fee credit card does not mean by default not getting rewards. Let’s say, the BMO CashBack MasterCard will offer 1% cash back regarding all spending types and it brings along bonuses of even $75 after the initial purchases you made.

29 Results Updated: August 14, 2019

19.90%

Interest Rate

Free

Annual Fee

-

Balance Transfer

Minimum Income

Min Credit Score: 640

More Details

Additional card features
Accord D financing
Quick and flexible financing for projects that are important to you.

Mobile payments
Tap and pay with your smartphone. It’s easy, free and secure.

Zero Liability in the event of fraud
Against fraudulent transactions made to your card.


Additional card at no annual fee
You can get an additional card for your spouse or other family member free of charge.


Manage your account
On your computer, smartphone or tablet


Cash advances
Up to $2,500 a day, anywhere in the world.


Hertz discount
Up to 15% at participating Hertz locations worldwide.


Balance transfers
Transfer the outstanding balances of your credit cards from other financial institutions to your Desjardins credit card account.


Other features

  • 21-day grace period to pay your bill without incurring credit charges
  • No transaction fees
  • Contactless payment technology
  • Online shopping protection
  • Visa Checkout (available on Visa cards only)
  • Masterpass

Options

  • Overdraft transfer to cover a cheque, bill payment, or any other transaction that exceeds the balance in your Personal Chequing Account (PCA) or any other eligible account
  • Credit Balance Insurance for a minimal fee
  • Automatic payment of your card balance at no charge with our Authorized Payment Service
  • Online monthly account statements at no charge

Card details

Network: Mastercard
Provider: Desjardins Credit Cards
Card type: Cashback, No Annual Fee

19.90%

Interest Rate

Free

Annual Fee

-

Balance Transfer

Minimum Income

Min Credit Score: 640

More Details

Additional card features
Accord D financing
Quick and flexible financing for projects that are important to you.

Mobile payments
Tap and pay with your smartphone. It’s easy, free and secure.

Zero Liability in the event of fraud
Against fraudulent transactions made to your card.


Additional card at no annual fee
You can get an additional card for your spouse or other family member free of charge.


Manage your account
On your computer, smartphone or tablet


Cash advances
Up to $2,500 a day, anywhere in the world.


Hertz discount
Up to 15% at participating Hertz locations worldwide.


Balance transfers
Transfer the outstanding balances of your credit cards from other financial institutions to your Desjardins credit card account.


Other features

  • 21-day grace period to pay your bill without incurring credit charges
  • No transaction fees
  • Contactless payment technology
  • Online shopping protection
  • Visa Checkout (available on Visa cards only)
  • Masterpass

Options

  • Overdraft transfer to cover a cheque, bill payment, or any other transaction that exceeds the balance in your Personal Chequing Account (PCA) or any other eligible account
  • Credit Balance Insurance for a minimal fee
  • Automatic payment of your card balance at no charge with our Authorized Payment Service
  • Online monthly account statements at no charge

Card details

Network: Visa
Provider: Desjardins Credit Cards
Card type: Cashback, No Annual Fee

19.90%

Interest Rate

Free

Annual Fee

-

Balance Transfer

Minimum Income

Min Credit Score: 640

More Details

You also get

  • Purchase Protection and Extended Warranty
  • Easy account management
  • Accord D financing: fast and flexible
  • Mobile payment: pay with your smartphone
  • Cash advances: up to $2,500 per day
  • An easier way to pay online with Visa Checkout
  • Zero Liability in the event of fraud
  • Option to transfer your balances to your Desjardins credit card

Card details

Network: Visa
Provider: Desjardins Credit Cards
Card type: Cashback, No Annual Fee, Student

19.95%

Interest Rate

Free

Annual Fee

3.00%

Balance Transfer

Promotional Balance Transfer: 1.95% interest for the first 6 months

$35,000/year

Minimum Income

Min Credit Score: 640

$25 Gift Card upon Approval

More Details

Earn cash back

Earn 2% Money-Back Rewards on your everyday purchases in two 2% Money-BackCategories of your choice, and 0.50% Money-Back Rewards on all your other everyday purchases.

Earn extra Rewards

Get your Rewards deposited into your Tangerine Savings Account and get a 3rd 2% Money-Back Category.

Automatic earning

Money-Back Rewards are earned automatically on everyday purchases and paid monthly. These can be applied to your Credit Card balance or redeemed into your Savings Account.

No limits

No limit on the amount of Money-Back Rewards you can earn on your everyday purchases. Conditions apply.

Transfer and save

During your first 30 days, transfer balances and pay only 1.95% interest on the transferred balance for the first 6 months (19.95% after that).

Track and categorize your spending

Organize your transactions and stay on top of your spending, so you can see your financial habits and you’ll get a better idea of what you have left to spend each month.

Card details

Network: Mastercard
Provider: Tangerine Credit Cards
Card type: Cashback, Low Interest, No Annual Fee, Travel Rewards

Special Offers

Earn 4% Money-Back Rewards in up to 3 Categories for 3 Months

19.99%

Interest Rate

Promotional APR: 7.99%

Free

Annual Fee

22.99%

Balance Transfer

No Minimum

Minimum Income

Min Credit Score: 300

More Details

Card details

Network: Visa
Provider: Scotiabank Credit Cards
Card type: Bad Credit / Establish New Credit, Cashback, No Annual Fee

Special Offers

7.99% introductory interest rate on everyday purchases for the first 6 months

Compare All No Annual Fee Credit Cards

When does it make sense to pay for credit card annual fee?

It could appear and seem counterintuitive, but to pay for a credit card is often a good value for the money since it comes with much better rewards subsequently. If you need to maximize the return, have a look at a rewards credit card, regardless if it comes even with a yearly fee. The best and most crucial factor is a net reward, since this will determine an overall value of that card and will notify you if this charge is worth the pay. If the spending on groceries and cash is huge, then the Scotia Momentum Visa Infinite Card is the best choice because you can earn 4% for such purchases mentioned. When this is in comparison to no fee card that otherwise offers just regular cash back of 1%, you will get a bigger net reward with this card. In addition, for a limited time span, the $99 yearly fee also can be waived in the first 12 months. But, if you are not a driver and do not cook a lot at home, such a card is not the best option for you since it will operate as 1% cash back card that you can get with ease and permanently with no fees.

Dynamic can be changed with special offers

There is another thing to be considered and this is special promotions. They boost and raise a net reward that you will get and will at often times counteract the yearly fees. So, cards special offers with yearly fee in general offer a good bonus rates and welcome points too, making them incredibly lucrative. Let’s look at the BMO World Elite MasterCard as being a great choice of a travel rewards credit card. Apart from collection of points on daily spending, such a card will also offer amazing sign up bonuses, in worth of $507 as reward points, also the travel extras like VIP Airport Lounge Access as well. Extra travel insurance benefits are seen too and get more beneficial and appealing for those frequent flyers. For you, the best credit card will always depend on basis on your personal spending adequately. It could seem complex to work this out, but the good part is that we will gladly do this hard work for you. Make sure you use our credit cards rewards calculator and thus compare net rewards for each and every different type of card. Just enter the spending habits for a regular, average month all across categories such as restaurants, groceries or travel; then make comparison of at least two cards or more, all side-by-side. Whatever you choose in the end, and whichever card type, keep in mind to ensure the chosen card is the very best offering for you.

         

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