Frequent flyer credit cards with no annual fee

A frequent flyer credit card with no annual fee is a great way to earn reward points without incurring any extra costs. These cards offer a range of benefits, like earning points in a frequent flyer program, or in another rewards program with points that can be transferred to a frequent flyer program. In some cases there will be other benefits, such as no foreign exchange fees or an introductory interest-free period on purchases.

Key takeaways

• Some frequent flyer cards are completely free to use. Others charge no fee in the first year.
• Free-to-use frequent flyer credit cards don't offer as many perks as cards that charge an annual subscription (except in the case where the first year is free).
• Consider the earn rate, bonuses, perks, and your travel plans when choosing between free-to-use and annual fee cards.

Types of no annual fee frequent flyer credit cards

1. No annual fee in the first year. Some frequent flyer credit cards offer a reduced — or totally waived — annual fee for the first year. Then they charge an annual fee from the second year onwards. This can save you between $50 to $450 or more over the first 12 months. The free first year offers you an opportunity to test the account and its benefits, such as bonus point offers or lounge access, before you decide.
2. No annual fee for life. A very limited selection of frequent flyer credit cards have no annual fee for life. These include the Qantas American Express Discovery and Coles No Annual Fee Mastercard. Use these cards to earn more points per $1 spent without paying a yearly fee for your credit card. However, there is a downside: these cards don't offer travel insurance or airport lounge passes, although there may occasionally be a moderate sign up bonus for meeting a spending target in the first three months.

How to compare frequent flyer credit cards with no annual fee

When looking for a credit card with no annual fee, consider the following factors before applying.

1. Annual fee. Only a few cards that earn frequent flyer points have no annual fee for life, but many regularly have none for the first year as an introductory offer.
2. Sign-up bonus points. These points can be redeemed for various rewards, such as travel, merchandise, or cash back. Again, only a very few no-fee cards will offer bonus points.
3. Points per $1 spent. This refers to the number of points that a cardholder earns for every dollar spent using the card. The rate at which points are earned can vary widely between cards and can be an important factor in choosing a credit card.
4. Interest-free days. This refers to the number of days during which cardholders are not charged interest on their balance. Cardholders typically have a grace period of several days after the end of each billing cycle during which they can pay their balance in full without incurring interest charges, but this grace period can vary by up to 11 days.
5. Other benefits. These perks vary widely between cards and can include things like travel insurance and airport lounge passes, but are only likely to be available on cards with a fee waived for the first year, not for life.

Is not paying an annual fee a missed opportunity?

Choosing whether or not to get a free-to-use frequent flyer credit card is not as easy as it may seem. On the one hand, credit cards with no annual fee may be appealing because you can save on the yearly cost of holding the card. However, it's important to consider the potential missed opportunities that come with not paying an annual fee.

The main disadvantage of choosing a card with no annual fee is that these cards often have lower earn rates. This means you'll earn fewer points per dollar spent. This can add up over time and result in a missed opportunity to get the high-value redemption you want, e.g. a long haul Business or First Class seat.

Pros (of not paying an annual fee)

• Save on the annual fee each year. You won't have to worry about paying an annual fee if you're not using your card as much as you initially anticipated.
• You'll still earn points. The reduced earn rate might not be a problem if you want to get something for nothing but don't have a specific target in mind.

Cons (of not paying an annual fee)

• Lower earn rate. It will take longer to earn points towards a flight, upgrade, hotel stay, etc.
• Fewer benefits and perks. It's unlikely for a card with no annual fee to come with extra perks like travel insurance or lounge access.

Ultimately, the decision to pay an annual fee depends on your circumstances and needs. Before choosing a credit card, consider how much you'll use the card, how many points you hope to earn, and what benefits are most important.

If you're a frequent traveller who spends a lot of money on flights, hotels, and other travel-related expenses, a card with an annual fee and a higher earn rate may be the better option.

However, if you only use your card occasionally and don't need the added benefits, a card with no annual fee may be the better choice.