Getting and Holding an Annual Fee Free Card

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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 CardThose 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?


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The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.


  1. I have been tempted to start signing up for some credit cards for the sign-up bonuses, but considering how many cards I see some bloggers talk about going through, how much does signing up for these cards affect ones credit score?

  2. Just make sure you use the no fee cards you have every now and then. I had a Amex Blue Cash Card which while not using was in my sock drawer. When I applied for another Amex credit card, they basically closed the card and sent me a letter saying they used the credit line for my new credit card.

    The moral of this story is that your no fee card, should not sit in the sock drawer. Unlike the credit cards with fees, the issuer is unlikely to give you periodic bonuses (Discover and Chase Freedom being the exception), so you have to remember to use it!

  3. You should probably touch on how ‘average age of accounts’ affects your credit score. For credit newbies, some of the first cards they apply for ought to be no-fee to make that average age as high as possible.

    One card I just came across you could highlight is the Amex Blue. I got it because it has no fee and let’s you keep your MR point balance alive while you churn Amex Gold/Platinum offers. Since Amex reports the age of your account as the age for any card you hold, it’s also useful to preserve that “cardmember since”-date when you are in between Amex cards.

  4. Dan, the short answer is that it will likely drop your credit score a couple of points in the short run, but as long as you pay your bills doesn’t hurt in the long run. The inquiry will potentially knock your score down a couple of points for a few months, but then the new credit you are issued will improve your debt to available credit ratio and likely help your score. The average age of accounts will be a bit lower as well. However, I have been doing this for years and have “excellent credit”. Just got the best rates on a house refinance, so for me it is worth having a lower score in the excellent range in order to get tons of miles and points.
    Arlington Traveler, I agree. That is why I would be picky about which annual fee free card(s) you have. I only have the Freedom (well in the miles/points realm, I also have Pottery Barn, Gap, etc). I have no problem using the Freedom because the 5x categories make it so valuable!
    DBest, agree and good point about the Amex Blue. Will add a sentence or to about AAOA.

  5. I had a Chase Freedom card for a while with a $5,000.00 limit, and then I consolidated because I really wanted the Visa Signature privileges. I then applied for the Chase Sapphire fee free version and got approved with a CL of $7,500.00. Then I consolidated my Freedom line into my Sapphire line making it to be a CL of $12.5K. I would like to upgrade to the Sapphire Preferred when my 12 months are over, but I have 7 inquiries on my credit report. How should I go about this? Or maybe go with the JP Morgan Select since there is no initial bonus?

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