Many people love earning credit card rewards, but the high annual fees charged by premium rewards credit cards can take a bite out of your earnings if you’re not careful. Not only do you have to keep up your spending level to justify the annual fee, but premium rewards cards are more difficult to qualify for, too. Many people can’t meet the high credit score and minimum income thresholds.

That’s where no-fee credit cards come in. In addition to no fees, the best no-annual-fee credit cards come with welcome bonuses and generous rewards.

If you’re looking for a more affordable credit card, you’ve come to the right place. I’ve compiled a list of 8 of the best no-annual-fee credit cards in Canada right now. I cover the various welcome offers and reward program details and let you know what I like most about each card. But first, a little background on no-fee credit cards.

What Is A No-Fee Credit Card?

A no-fee credit card doesn’t charge you an annual fee for using it. In other words, you get the same convenience as a premium credit card, along with any available features and benefits, and rewards, without the yearly fee.

However, while a no-annual-fee credit card can save you money, most come with fewer benefits and lower rewards compared to cards with annual fees. In some cases, the interest rates on these cards are higher, making it even more important to pay off your credit card balance in full every month to avoid any extra charges.

Before you choose a no-fee credit card, it’s important to weigh your options to find the one that best suits your needs and spending habits. Consider the different factors, such as:

• Reward programs (cash back, points, or travel miles)
• Introductory offers and bonuses
• Interest rates for purchases and balance transfers
• Additional benefits such as purchase protection, extended warranty, and insurance coverage

A no-fee credit card can be the right choice. Just remember to compare your options, pay off your credit card balance in full each month, and use the card responsibly to ensure you’re getting the most out of it.

Types of No Annual Fee Credit Cards

No-fee credit cards can vary, catering to different preferences and spending habits. However, most credit cards can be sorted into the following categories: Cash back cards, travel rewards Cards, and regular rewards cards.

Nowadays, there aren’t too many cards that don’t offer, at the very least, modest benefits. Let’s take a closer look at what you can expect with the various types of no-fee cards.

Cash Back Cards

Cash back credit cards allow you to earn a percentage of your spending back in the form of cash, which can be redeemed for gift cards, merchandise, statement credits, or deposited into your bank account. There is no shortage of options when it comes to no-annual-fee cash back cards for Canadians.

One thing to be mindful of is the earning rate. Some cash back cards boost the percentage of cash back in certain categories but have a low rate for most purchases. Try to find a card that offers a generous standard cash back rate of 1% or more. From there, find out if bonus cash back is offered in the categories where you spend the most money.

Travel Rewards Cards

Travel rewards credit cards can help you earn rewards that you can use toward your next trip. These cards typically offer points or miles for every dollar you spend.

Not having an annual fee has its advantages and disadvantages. Without the yearly fee, you can accumulate rewards faster and redeem them for flights, hotels, or other travel-related expenses.

However, most no-fee cards offer a lower earning rate than premium travel credit cards. For example, you might earn a 1% reward (or less) versus an earn rate of 2% or higher with a premium credit that charges an annual fee.

If your goal is to collect travel rewards, you’ll have to decide whether your spending level justifies paying the annual fee. If not, the no-fee card is your best bet.

Other Rewards Cards

Beyond cash back and travel rewards, other no-annual-fee cards offer different rewards.

Some no-fee credit cards cater to shopping habits, offering bonus points or discounts at specific retailers. Others might offer rewards for gas purchases, dining, or entertainment spending.

For example, the Scotiabank American Express Card allows you to redeem points at Cineplex movie theatres, groceries, restaurants, etc. The key is to find a card with rewards that match your interests and lifestyle.

As you can see, there are plenty of reward options, making it easy to enjoy valuable rewards without having to pay an annual fee.

The Best No Annual Fee Credit Cards in Canada

The following credit cards are among the best no-fee cards in Canada. Each card has its own features and benefits, so read through the card details carefully before choosing a specific card or deciding that a no-fee card is right for you.

1. Tangerine Money-Back Credit Card

Annual Fee: $0

Purchase Interest Rate: 19.95%

Welcome Bonus: Apply for a Tangerine Money-Back Credit Card by October 31, 2023, and earn an extra 10% cash back on up to $1,000 in everyday purchases made within your first 2 months.

Rewards Program Details: Earn 2% money back on regular purchases in up to 3 categories of your choice. There is no spending limit to qualify for the 2% reward, which is paid monthly.

What We Like: The 2% standard cash-back reward is very generous for a no-fee card.

Card Summary: From the digital bank well known for its no-fee banking and high-interest savings account, the Tangerine Money-Back Credit Card is a fantastic choice for those looking for an affordable credit card with excellent cash back rewards and a competitive interest rate. Its flexible rewards program, generous welcome bonus, and the ability to link your rewards to a Tangerine Savings Account make it a top contender for anyone in search of a friendly, budget-conscious credit card.

Learn more about the Tangerine Money-Back Credit Card

2. American Express Green Card

Annual Fee: $0

Purchase Interest rate: 20.99%

Welcome Bonus: 10,000 Membership Rewards points when you charge $1000 in purchases to your Card in the first 3 months.

Rewards Program Details: 1 point for every dollar spent on eligible card purchases. 1 additional point per dollar spent on eligible hotel and car rental purchases, which must be made through the American Express Travel website.

What We Like: The flexibility with point redemption options.

Card Summary: The American Express Green Card is an excellent choice for those who want a no-fee credit card with a moderate annual fee that offers decent rewards for dining and travel. Amex’s flexible points system adds to the card’s value.

In addition to redeeming points towards eligible card purchases, including groceries, streaming subscriptions, food & drinks, and travel, you can use them towards Amazon.ca and AirCanada.com purchases. You can also transfer your points to various frequent flyer and loyalty programs, including Aeroplan, Avios, and Marriott Bonvoy.

3. MBNA Rewards Platinum Plus Mastercard

Annual Fee: $0

Purchase Interest Rate: 19.99%

Welcome Bonus: 5,000 bonus points after you make $500 or more in eligible purchases within the first 90 days of opening your account. You can earn an additional 5,000 points if you enroll for paperless e-statements within 90 days of opening your account. Earn 4 points per dollar on eligible restaurant, grocery, digital media, membership, and household utility purchases during the first 90 days.

Rewards Program Details: Earn 2 points per dollar on eligible restaurant, grocery, digital media, membership, and household utility purchases up to a $10,000 annual spend per category. Earn 1 point per dollar on all other purchases. Redeem points for cash back, merchandise, gift cards, travel, and charitable donations. Points never expire as long as your account is open and in good standing.

What We Like: The card features additional benefits such as mobile device insurance, extended warranty and purchase assurance benefits, and car rental discounts through Avis and Budget.

Card Summary: The MBNA Rewards Platinum Plus Mastercard is an excellent choice if you want a no-fee credit card that offers a generous welcome bonus, rewarding points on grocery purchases and recurring bill payments, and all-around splendid rewards. Give it a try and enjoy the perks of earning rewards without worrying about an annual fee.

4. TD Rewards Visa Card

Annual Fee: $0

Purchase Interest Rate: 19.99%

Welcome Bonus: Earn 19,697 TD Rewards points ($65 value on Amazon.ca) if your account remains open, active, and in good standing for the first 90 days. The application deadline for this offer is September 5, 2023. A dedicated offer is available for students.

Rewards Program Details: Earn 4 TD Rewards Points per dollar spent on travel through the Expedia for TD website portal, 3 points per dollar spent on groceries and restaurant purchases, 2 points per dollar for recurring bill payments, and 1 TD Rewards point for all other purchases.

There are many ways cardholders can redeem TD Rewards points, including on travel through Expedia for TD, purchases at Amazon.ca, Starbucks, and more.

What We Like: The ability to earn bonus points for select categories, such as travel, groceries, restaurants, etc.

Card Summary: The TD Rewards Visa Card is an excellent choice if you’re looking for a no-fee credit card with a standard APR and a versatile rewards program. With its welcome bonus, easy point earnings, and flexible redemption options, your TD Rewards Visa Card can help you make the most of your hard-earned money.

5. Scotiabank American Express Card

Annual Fee: $0

Purchase Interest Rate: 19.99%

Welcome Bonus: Earn up to 5,000 bonus Scene+ points by making at least $750 in eligible purchases within the first 3 months. Earn an additional 2,000 Scene+ points when you spend at least $5,000 in purchases during the first year. The points will be awarded in two installments if you qualify. You must open an account by October 31, 2023.

Rewards Program Details: This card rewards members with Scene+ points. You earn 3X points on every dollar you spend at eligible grocery stores, including Sobeys, Safeway, Foodland, FreshCo, Thrifty Foods, and more. In addition, you earn 2X points per dollar spent at eligible restaurants, including food delivery and meal subscription services, 2X points for every dollar spent on eligible entertainment purchases, transit, and rideshare services, select streaming services, and more.

What We Like: The flexibility of earning Scene+ points on a wide variety of purchases.

Card Summary: The Scotiabank American Express Card offers you a cost-effective option with no annual fee and a solid rewards program. In addition to the valuable Scene+ rewards program, the card also includes New Mobile Device Insurance coverage, as well as Purchase Security & Extended Warranty Protection. Additional insurance coverage is optional.

6. CIBC Aeroplan Visa Card

Annual Fee: $0

Purchase Interest Rate: 20.99%

Welcome Bonus: Earn 10,000 Aeroplan points when you make your first purchase (enough points for a one-way economy class short-haul ticket in North America.)

Rewards Program Details: Earn 1 Aeroplan point for every dollar spent on eligible gas, electric vehicle charging, groceries, and Air Canada travel purchases. Earn 1 point for every $1.50 spent on all other purchases.

What We Like: Excellent insurance coverage for a no-fee credit card.

Card Summary: The CIBC Aeroplan Visa Card allows Air Canada customers to earn valuable Aeroplan points that they can redeem for travel on Canada’s largest airline. The card features a generous welcome offer with a value of up to $200, but perhaps most impressive is the complimentary insurance coverage, which includes Auto Rental Collision and Loss Damage Insurance. Note that the standard 20.99% APR is higher than other cards on our list.

7. Brim Mastercard

Annual Fee: $0

Purchase Interest Rate: 19.99%

Welcome Bonus: Earn up to $200 in bonus rewards after you make your first purchases with participating retailers.

Rewards Program Details: Earn 1 point per dollar spent. In addition to the standard 1% earn rate, you can earn up to 30% back in bonus offers from more than 250 Brim retail partners. You can redeem your points against transactions made on your card. And the minimum redemption is only 100 points, or $1.

What We Like: The Brim Mastercard has several unique features, including no foreign exchange fees, no fewer than 5 types of purchase, and travel insurance, including Ticket Protector Insurance. There’s also an Installment Pay option on purchases over $500. Last but not least, cardholders receive complimentary Boingo Wi-Fi access at Boingo Hotspots when traveling.

Card Summary: The Brim Mastercard is one of the more unique credit cards on our list. For starters, the company is the only Canadian fintech licensed to issue its own credit cards (other fintechs must partner with a 3rd party credit card provider.) But while Brim is not a bank, it has a lot to offer with its no annual fee Mastercard. The 1% standard earn rate is attractive (you earn 1 point per dollar spent, 100 points = $1 value), and international travelers will love the fact that there are no foreign exchange fees (most credit cards charge 2.5%). You also get five types of insurance coverage. It all adds up to a great value for a credit card with no annual fee.

8. Simplii Financial Cash Back Visa

Annual Fee: $0

Purchase Interest Rate: 19.99%

Welcome Bonus: A 9.99% introductory annual interest rate for the first 3 months. Also, during the first three months, you’ll earn 20% cash back on eligible gas, grocery, and drugstore purchases and pre-authorized payments, up to a maximum spend of $500 ($100 value).

Rewards Program Details: Earn 4% on eligible restaurant, bar, and coffee shop purchases up to $5000 yearly. Earn 1.5% on gas and groceries, purchases at drugstores, and pre-authorized payments up to $15,000 yearly. The earn rate for all other credit card purchases is 0.50%, with no spending limit.

What We Like: Up to 4% earn rate and complimentary CIBC Travel Medical Insurance coverage.

Card Summary: The Simplii Financial Cash Back Visa is an excellent choice because of its generous cash back program, welcome bonus offers, and widespread Visa card acceptance. If you tend to spend money dining out or at the coffee shop, with a 4% earning rate in those spending categories, this card should be high on your list. The card also comes with Purchase Security and Extended Protection Insurance and CIBC Travel Medical Insurance (complimentary travel medical coverage is rare for a no-fee credit card.)

Common Features of a No Annual Fee Credit Card

I can remember a time when no-fee credit cards were no-frills products with little to offer in the way of other benefits, like welcome bonuses, rewards programs, and insurance coverage. Nowadays, you can expect all of these perks on a single card. And while each card on our list differs in its offering, here are some common features many no-fee cards share.

1. Rewards Programs. You are likely to receive a rewards program with your no-fee credit card. Rewards can be in the form of cash back, rewards points, or travel miles, depending on the card issuer. Do your best to take advantage of these programs to maximize the value of your card.

2. Zero-Percent Interest Introductory Offers. Sometimes, no-fee credit cards come with 0% introductory interest offers. This means you won’t have to pay any interest on your purchases for a specified period, which can help you save money if you need to make a big purchase or consolidate debt. Just keep in mind that after the introductory period, the interest rate will go back to the regular interest rate.

3. Purchase Insurance Coverage. Most no-fee credit cards offer purchase protection insurance, including some extended warranty coverage. This is a valuable benefit that can come in handy if you tend to purchase big-ticket items with your credit card.

4. Additional Perks. As you can see from our list, many no-fee cards come with additional perks, such as free credit score access, no foreign exchange fees, an Installment Pay feature, complimentary Wi-Fi access, car rental insurance, etc. While these benefits may not be as extensive as those available on premium rewards cards, they still add value to your credit card experience.

Always compare different options, read the terms and conditions, and choose the right card that meets your needs and financial goals.

Pros and Cons of No Annual Fee Credit Cards

Pros

• Help you save money: With no annual fee, you’ll have one less expense to worry about. This could potentially save you hundreds of dollars over the years, especially if you don’t use your credit card often.
• Offer rewards programs: Many no-fee credit cards offer rewards programs, such as cashback, travel points, or merchandise rewards. By using these cards for everyday purchases, you can earn rewards without paying an extra fee for the privilege.
• Easier to qualify for: While you must have solid credit to be approved for a no-fee credit card, the qualifying criteria are lower compared to premium rewards credit cards. Many no-fee cards will accept a lower credit score and have little to no minimum income requirement.

Cons

• Higher interest rates: Some no-fee cards come with higher interest rates than their annual fee counterparts, meaning you could end up paying more in interest if you carry a balance from month to month.
• Fewer benefits: In general, annual fee credit cards offer fewer perks and benefits compared to cards that charge an annual fee. This includes lower reward rates, less comprehensive insurance coverage, and smaller sign-up bonuses.
• Reduced credit limit: Some no-fee credit cards have lower credit limits, which may not be ideal if you need a higher spending limit for significant purchases or emergencies.

In the end, it’s essential to weigh the pros and cons when considering a credit card with no annual fee. Consider your spending habits and needs while making your decision. Remember, the best credit card is the one that aligns with your financial goals and lifestyle.

The Best No-Fee Credit Cards: Final Thoughts

A credit card with no annual fee can be a great way to save money and simplify your finances, but it’s important to choose a card that matches your spending habits and financial goals.

For example, if you spend a lot of money on groceries, the Scotiabank American Express Card is an excellent choice, while the Tangerine Money-Back card allows you to choose 3 spending categories to earn 2% cash back.

Remember to compare introductory offers, but don’t base your decision solely on a welcome bonus, as it’s a one-time offer. Cards with superior rewards programs and earning rates will be better in the long run.

In the end, it comes down to understanding your needs and carefully reviewing the available options. Happy card hunting!

FAQs

How do banks benefit from offering no-fee credit cards?

Banks generate revenue from no-annual fee credit cards through interest charges, merchant fees, and other charges like late payment fees and foreign transaction fees. By offering no annual fee cards, banks can attract more customers, who might later choose other financial products and services from the same bank.

Are rewards and benefits lower on no-fee credit cards?

No annual fee credit cards may offer fewer rewards and benefits compared to cards with an annual fee. However, this isn’t always the case, as some no-annual fee credit cards still offer competitive rewards and perks. It’s important to compare each card’s specific offerings and choose the one that best suits your needs and spending habits.

Can I build my credit score using a no-fee credit card?

Yes, you can build your credit score using a no-fee credit card by consistently making on-time payments and maintaining a low credit utilization ratio. Credit card issuers report your payment history to credit bureaus, which helps establish and improve your credit score over time.

Are there hidden fees associated with no annual fee credit cards?

While there’s no annual fee, some cards could still have other fees, like late payment fees, balance transfer fees, or foreign transaction fees. These fees aren’t hidden, but they are often buried in the fine print, far away from the splashy marketing pages touting the benefits of the card. You should always carefully read a card’s terms and conditions to understand the potential fees that may apply.