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On miles and points blogs (including this one), you often read a bunch about getting rewards credit cards. As you likely know, many of those cards carry an annual fee, at least after the first year. For some this isn’t a big issue as the perks outweigh the fees, for others the cards are sometimes not kept long enough for that fee to matter much, but in other cases the fee is a big problem as the person wants to keep a card for the long term, but doesn’t want to pay $100 or more per year to do so. I have recently been getting an influx of questions about a good rewards card to get if you aren’t interested in holding cards with big annual fees, so I thought it was a good idea to devote a post to that topic.
Keep Annual Fee Free Cards for the Long Term:
I personally don’t want to be viewed by the banks as a customer who obtains and cancels cards habitually for the lucrative sign-up bonuses. However, I am okay being viewed as a customer who sometimes changes up what cards they have depending on their changing needs and wants. For example, that may mean that this year I have the United card, but then I get mad at United for devaluing their award chart, or de-hubbing where I live, or whatever, and decide I’m not flying them enough to justify the annual fee for the co-branded card. Perhaps after that I think the Hyatt card is better aligned with my needs, so I get that one. At the same time I may need to travel to some destinations not served by Hyatt, so I get the Chase IHG Rewards Visa. You get the idea.
While all that theoretically is going on, if I have a quality annual fee free card, then I don’t have to worry as much about whether or not that card is worth it for me at the moment given the annual fee…because it doesn’t have one. I can keep it for the long haul, and hopefully demonstrate to the bank I’m not a looney who just opens and closes accounts all the time. Holding an annual fee credit card for the long term will also help your average age of accounts. The Freedom I have is my oldest Chase card, and my oldest open credit card. It has been converted a few times from different products that no longer exist, but the account has remained open and in good standing. Having some really old accounts helps with your average age of accounts, though even once you close an account the age still helps your overall credit score until it eventually falls off your report many years later.
My Favorite Annual Fee Free Card:
There are lots of annual fee free cards out there, but some are much better than others. I’m obviously a rewards junkie, so I want even my annual fee free card to be working to save me money or get me closer to my next trip. For me, the personal annual fee free card that I think is by far the best is the Chase Freedom®. In addition to the 5x rotating quarterly bonus categories, the points you earn with the Freedom can transfer 1:1 to the Ultimate Rewards transfer partners like United, Hyatt, and British Airways, if you also have the Chase Sapphire Preferred® Card, Ink Plus® Business Card, or Ink Bold® Business Card. You can also transfer to hotel and airline parents if your spouse or domestic partner has one of those three mentioned cards by transferring your points earned on the Freedom to their account. If you and your partner don’t have one of those cards, then your points earned with the Freedom are essentially worth one cent each toward cash back or gift cards. Currently, some retailers are even paying out more in the Ultimate Rewards shopping portal if you are logged in with the Freedom card than if you are logged in with a card like the Chase Sapphire Preferred.
Other Good Fee Free Options:
Even though the Freedom is my favorite and my go-to annual fee free card, there are other good fee-free personal cards out there including the Chase Sapphire® Card, the Capital One Venture Rewards Card, the Barclaycard Arrival™ World MasterCard®, Capital One Quicksilver Cash Rewards, or the Discover It Card. Those all give relatively decent awards considering you aren’t paying an annual fee.
I’ll get more in detail on some of those cards in another post, but for now I just wanted to start the conversation about having and keeping a good annual fee free card, and share which one has a permanent spot in my wallet.
Do you keep an annual fee free card or two around for the long haul?
Disclosure: I do receive a commission if you are approved for a credit card using one of my affiliate links. Some in this post are my links, and some are not. As always, thanks for your support.