Photo by Blake Wisz on Unsplash
Three words. Say it and I’m yours. “No annual fee”. It’s enough to make anyone’s heart melt, but what should you know about these credit cards?
Credit cards with no annual fee - the phrase is pretty self explanatory. Some credit card providers charge an annual fee - sometimes upwards of $400 - so you can borrow money with interest. But, as they say, there’s no such thing as a free lunch. No annual fee credit cards do exist, but where are they, and what’s the trade-off? We’ve looked at rewards cards, as well as cards with complimentary travel insurance - now let’s look at no annual fee cards.
What credit cards have no annual fee?
Depending on who you ask, the good thing is there’s plenty of credit card products out there that have no annual fee, and you don’t necessarily have to look very hard. Below are some products that have no annual fee.
Keep in mind, the details were correct at the time of writing, we aren’t endorsing any one product and we haven’t compared all products in the market.
|
Provider and Product Name |
Purchase rate p.a./Interest free period |
Points & Extras |
|---|---|---|
|
American Express
|
|
|
|
Bankwest
|
|
Zero Platinum: Fee free foreign transactions, complimentary travel insurance |
|
Latitude Financial 28 Degrees |
21.99%/55 days |
Flight Delay Pass, fee free foreign transactions, free Boingo Wi-Fi hotspots |
|
Bank Australia Visa Credit Card |
12.39%/55 days |
- |
|
ING Orange One |
11.99%/45 days (9.99% via instalment plan) |
Fee free foreign transactions/ATM rebates if you deposit $1,000/mo and make 5+ settled card transactions |
|
Coles No Annual Fee Mastercard |
19.99%/55 days |
1 flybuys point per eligible $2 spend, purchase protection insurance |
American Express
Amex has a few cards that do not attract an annual fee. Many of its cards attract fees of $300 or more. But what you likely get in return for no annual fee is a low frills card. Some Amex credit cards with no annual fee include:
-
Qantas Discovery: 20.74% p.a. purchase rate, 44 days interest free period. 0.75 Qantas points per dollar spent.
-
Velocity Escape: 20.74% p.a. purchase rate, 55 days interest free period. Earn 0.75 Velocity (Virgin) points per dollar spent.
-
Low Rate: 8.99% p.a. purchase rate, 55 days interest free period.
-
Essential: 14.99% p.a. purchase rate, 55 days interest free period.
As you can see, there are two frequent flyer cards, but the trade off is you will see a higher interest rate if you don’t pay your bill before the interest-free period ends, as opposed to the other two.
Frills are also fairly limited across these cards - for example, there are no fee free intentional transactions or complimentary travel insurance.
Bankwest
Bankwest has two credit cards that attract no annual fee. They are:
-
Zero Classic: 17.99% p.a. purchase rate, 55 days interest free period.
-
Zero Platinum: 17.99% purchase rate, complimentary travel insurance, fee free foreign transactions, 55 days interest free period.
As you can see, both are pretty straightforward and low frills. However, Zero Platinum features both complimentary travel insurance and no foreign transaction fees (the Zero Classic charges 2.95% of the foreign transaction amount). Bankwest’s travel insurance is provided by Cover-More.
Latitude Financial 28 Degrees
Latitude has its own no-annual-fee card, called 28 Degrees.
Key details:
-
21.99% p.a. purchase rate, 55 days interest free period, $0 international transaction or currency conversion fees.
28 Degrees, in comparison to other products we’ve looked at, has a few extra perks with its card. These include a ‘Flight Delay Pass’, which grants access to lounges if your flight is delayed. The card also offers free Wi-Fi access at more than one million hotspots around the world through Boingo hotspots.
Bank Australia
Bank Australia also has a credit card with no annual fees, powered by Visa.
Key details:
-
12.39% p.a. purchase rate, 55 days interest free period.
That’s it. That’s the product. It’s a low-frills card with a fairly low interest rate.
ING Orange One
ING’s Orange One has no annual fee, plus a couple other perks.
Key details:
-
11.99% p.a. purchase rate, 45 days interest free period. Offers rebates on international transaction fees and ATM fees to those that satisfy the conditions.
The international transaction/ATM fee rebate applies if you deposit $1,000+ a month from an external bank account into an ING account in your name (excludes Orange One and Living Super accounts), as well as make 5+ settled card purchases per month with an ING debit or credit card. You could also receive a lower interest rate of 9.99% p.a. if you use ING’s instalment plan.
Coles
The supermarket giant has a popular product in the No Annual Fee Mastercard, underwritten by Citigroup. Key details are:
-
19.99% p.a. purchase rate, 55 days interest free period.
As it’s associated with the supermarket, it has a couple of key perks. The first is flybuys points, where you can earn one point per $2 spent. ‘Eligible’ purchases exclude products like tobacco and gift cards. There is also purchase protection insurance, which covers items you buy with your card if they are permanently lost, stolen or accidentally damaged.
What’s the trade-off with no annual fee credit cards?
If you opt for a credit card with no annual fee, you may miss out on extra perks such as rewards points, international travel benefits and more. However, some cards could still have these perks. Also, as with all credit cards, keep an eye on the interest rate and interest-free period. Some rates are upwards of 20% p.a., and some periods are as short as 44 days.
Another thing you might want to watch out for is the minimum credit limit. While some are as low as $1,000, other minimums are as high as $6,000. If you’re responsible with your money and diligently live within your means, you might not run into any trouble. However, the high minimum credit limit could mean you are given a lot of leash to run with, so to speak.
As with a lot of credit card products, there are also income limits. They can be pretty low - around $35,000 in some cases - but if you’re unemployed or a student, you might want to reassess your need for a credit card in the first place.
Savings.com.au's two cents
No annual fee sounds like an attractive proposition, especially if you’re looking for a card to keep in your wallet and not think much about. However, the trade-off, as we’ve seen, is that no annual fee cards may be fairly feature-light. That is to say that you might not get the tip-top rewards programs, the international lounge access, the XYZ benefits. Although, some cards still offer features such as fee-free international transactions and limited points programs. Again, however, there’s no free lunch - you may face a higher interest rate or a shorter interest-free period. All in all, if you’re in the market for a credit card with no annual fee, there’s quite a few products out there - you just need to look at the finer detail to find the one that works with your needs.
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