No annual fee credit cards

Get a no annual fee card for a rainy day. If you don't use it, it won't cost you anything to keep the account open.

By   |   Verified by David Boyd   |   Updated 10th September 2020

Comparing no annual fee credit cards

Citi Rewards Card Balance Transfer Offer

On Citi's website

Apply by 30 November 2020

Citi Rewards Card Balance Transfer Offer

Balance transfer

30 months at 0% p.a.

Purchase rate

21.49% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • Enjoy 0% p.a. on balance transfers for 30 months which could help you get on top of things. A one-off 1.5% balance transfer fee applies.
  • Earn Citi Rewards points as you spend using the card: 1 point per $1 Domestic spend (capped at $10,000 per statement period); or 1 point per $1 International spend (uncapped).
  • Feel secure with the complimentary Insurances: International Travel Insurance, Transit Accident Insurance, Purchase Cover Insurance, Extended Warranty Insurance, and Guaranteed Pricing Scheme.
  • Indulge convenience with contactless payment: Mastercard® PayPass, Apple Pay, and Samsung Pay.
  • Enjoy a free bottle of wine every time you dine at partner restaurants.
NAB Straight Up Credit Card

On NAB's website

NAB Straight Up Credit Card

Balance transfer

N/A

Purchase rate

0% p.a. ongoing

Annual fee

N/A

Highlights

  • Get the newest credit card from NAB - simple, cheap and most of all no interest charges!
  • No Use, No Pay. If you don't use your NAB Straight Up credit card during the whole statement period, the monthly fee will be reversed. No surprise charges!
  • Use your card to pay foreign currency and enjoy no foreign transaction fees!
  • Predictable fixed minimum payments based on your credit limit, giving you certainty of what to pay each month.
ANZ Low Rate

On ANZ's website

ANZ Low Rate

Balance transfer

22 months at 0% p.a.

Purchase rate

12.49% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • 0% p.a. for 22 months on balance transfers (1.5% balance transfer fee applies). Reverts to cash advance rate of 20.24% p.a.
  • Low 12.49% p.a. ongoing rate on purchases.
  • No annual fee for the first year ($58 thereafter).
Virgin Money No Annual Fee Credit Card

On Virgin Money's website

Apply by 30 September 2020

Virgin Money No Annual Fee Credit Card

Balance transfer

12 months at 0% p.a.

Purchase rate

18.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • $0 annual fee for the life of the card.
  • Transfer your balance at 0% p.a. for 12 months on balance transfers (reverts to 20.99% p.a.)
  • Up to 55 interest-free days on purchases.
Kogan Money Black Card

On Kogan Money's website

Apply by 31 October 2020

Kogan Money Black Card

Balance transfer

22 months at 0% p.a.

Purchase rate

20.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • No annual fees.
  • 0% p.a. for 22 months on balance transfers with 1% balance transfer fee. Reverts to cash advance rate of 21.74% p.a.
  • Earn $50 Kogan.com Credit when you are approved and spend $1000 or more on everyday purchases in the first 60 days.
St.George Vertigo Visa

On St.George's website

Apply by 30 September 2020

St.George Vertigo Visa

Balance transfer

22 months at 0% p.a.

Purchase rate

7 months at 0% p.a.

Annual fee

$0.00 for 1st year

Highlights

  • 0% for 22 months on balance transfers with 1.5% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • 0% p.a. on purchases for up to 7 months from card approval (reverts to 13.99% p.a. thereafter).
  • $0 p.a annual fee for the first year ($55 p.a. thereafter).
Bendigo Bank Low Rate Mastercard

On Bendigo Bank's website

Apply by 30 September 2020

Bendigo Bank Low Rate Mastercard

Balance transfer

6 months at 0% p.a.

Purchase rate

11.99% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • No annual fee for the first year ($45 p.a. thereafter).
  • Receive a $150 Woolworths Supermarket Gift Card when you spend $1,000 on eligible purchases within 60 days of account opening.
  • 0% p.a. on balance transfers for 6 months. Purchase rate of 11.99% p.a. applies thereafter.
Bankwest Zero Mastercard

On Bankwest's website

Bankwest Zero Mastercard

Balance transfer

9 months at 2.99% p.a.

Purchase rate

17.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • Pay no annual fee as long as you hold the card.
  • 2.99% p.a. for 9 months on balances transferred. Reverts to 17.99% p.a. thereafter.
  • Up to 55 days interest-free on purchases.
Qantas American Express Discovery Credit Card

On American Express' website

Qantas American Express Discovery Credit Card

Balance transfer

N/A

Purchase rate

20.74% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • Earn 0.75 Qantas Point for every $1 spent on Card purchases, except spend at government bodies in Australia where you will earn 0.5 Qantas Points per $1 spent.
  • Earn 1 additional Qantas Point per $1 spent on eligible Qantas products and services.
  • Pay no annual card fee.
St.George No Annual Fee Credit Card

On St.George's website

Apply by 30 September 2020

St.George No Annual Fee Credit Card

Balance transfer

12 months at 0% p.a.

Purchase rate

20.74% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • 0% for 12 months on balance transfers with 1% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • $0 annual fee for as long as you have the card.
  • Enjoy up to 55 days interest-free period.
ANZ Platinum Credit Card

On ANZ's website

ANZ Platinum Credit Card

Balance transfer

N/A

Purchase rate

17 months at 0% p.a.

Annual fee

$0.00 for 1st year

Highlights

  • 0% p.a. on purchases up to 17 months (reverts to 20.24% p.a. thereafter).
  • Up to 55 days interest free on purchases when you pay your account in full each month.
  • No annual fee for the first year (save $87). Enjoy $0 p.a. annual fee each year thereafter if you make $20,000 of eligible purchases in 12 months.
BankSA Vertigo Credit Card

On BankSA's website

Apply by 30 September 2020

BankSA Vertigo Credit Card

Balance transfer

22 months at 0% p.a.

Purchase rate

7 months at 0% p.a.

Annual fee

$0.00 for 1st year

Highlights

  • 0% for 22 months on balance transfers with 1.5% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • 0% p.a. on purchases for up to 7 months from card approval (reverts to 13.99% p.a. thereafter).
  • $0 p.a annual fee for the first year ($55 p.a. thereafter).
ANZ First for Students Credit Card

On ANZ's website

ANZ First for Students Credit Card

Balance transfer

N/A

Purchase rate

20.24% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • $0 p.a. annual fee for the first year, then $30 p.a..
  • An easy to manage credit limit from $500 will mean you can't build up a lot of debt.
  • Make every day a little bit easier and do your banking on the go with the ANZ App.
Bankwest Zero Platinum Mastercard

On Bankwest's website

Bankwest Zero Platinum Mastercard

Balance transfer

9 months at 2.99% p.a.

Purchase rate

17.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • No annual fee.
  • 2.99% p.a. for 9 months on balances transferred.
  • No foreign transaction fees and complimentary international credit card travel insurance.
BankSA No Annual Fee Credit Card

On BankSA's website

Apply by 30 September 2020

BankSA No Annual Fee Credit Card

Balance transfer

12 months at 0% p.a.

Purchase rate

20.74% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • No more annual fee, ever.
  • 0% p.a. for 12 months on balance transfers with 1% balance transfer fee on amounts transferred. Reverts to 21.49% p.a. thereafter.
  • Get up to 3 extra cardholders for free.
St.George Amplify Platinum Credit Card (Amplify)

On St.George's website

Apply by 30 September 2020

St.George Amplify Platinum Credit Card (Amplify)

Balance transfer

22 months at 0% p.a.

Purchase rate

7 months at 0% p.a.

Annual fee

$0.00 for 1st year

Highlights

  • 0% p.a. for 22 months on balance transfers with 1.5% balance transfer fee. Reverts to cash advance rate.
  • 0% p.a. on purchases for up to 7 months from card approval (reverts to 19.74% thereafter).
  • $0 annual fee for the first year ($99 p.a. thereafter).
Bank of Melbourne Vertigo Visa

On Bank of Melbourne's website

Apply by 30 September 2020

Bank of Melbourne Vertigo Visa

Balance transfer

22 months at 0% p.a.

Purchase rate

7 months at 0% p.a.

Annual fee

$0.00 for 1st year

Highlights

  • 0% for 22 months on balance transfers with 1.5% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • 0% p.a. on purchases for up to 7 months from card approval (reverts to 13.99% p.a. thereafter).
  • $0 p.a annual fee for the first year ($55 p.a. thereafter).
Bank of Melbourne Amplify Platinum Credit Card (Amplify)

On Bank of Melbourne's website

Apply by 30 September 2020

Bank of Melbourne Amplify Platinum Credit Card (Amplify)

Balance transfer

22 months at 0% p.a.

Purchase rate

7 months at 0% p.a.

Annual fee

$0.00 for 1st year

Highlights

  • 0% p.a. for 22 months on balance transfers with 1.5% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • 0% p.a. on purchases for up to 7 months from card approval (reverts to 19.74% p.a. thereafter).
  • $0 annual fee for the first year ($99 p.a. thereafter).
BankSA Amplify Platinum Credit Card (Amplify)

On BankSA's website

Apply by 30 September 2020

BankSA Amplify Platinum Credit Card (Amplify)

Balance transfer

22 months at 0% p.a.

Purchase rate

7 months at 0% p.a.

Annual fee

$0.00 for 1st year

Highlights

  • 0% p.a. for 22 months on balance transfers with 1.5% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • 0% p.a. on purchases for up to 7 months from card approval (reverts to 19.74% p.a. thereafter).
  • $0 annual fee for the first year ($99 p.a. thereafter).
St.George Rainbow Vertigo Visa

On St.George's website

Apply by 30 September 2020

St.George Rainbow Vertigo Visa

Balance transfer

22 months at 0% p.a.

Purchase rate

7 months at 0% p.a.

Annual fee

$0.00 for 1st year

Highlights

  • 0% p.a. on purchases for up to 7 months from card approval (reverts to 13.99% p.a. thereafter).
  • 0% p.a. for 22 months on balance transfers with 1.5% balance transfer fee. Reverts to cash advance rate of 21.49% p.a.
  • $0 p.a annual fee for the first year ($55 p.a. thereafter).

Overview

'No annual fee' credit cards conform to exactly what it says on the tin: you won't be charged an annual fee for having a credit card account and using the card for purchases, bill payments or cash advances. Where other cards may charge annual fees in the range $30 to $1,450 (and even more for prestige business cards), credit cards with no annual fees charge precisely $0.

(For the purposes of comparison, Finty may from time to time include on its 'No annual fee' credit cards page a selection of cards with an annual fee waiver in the first year only.)

'No annual fee' can also mean 'no frills'

All Australian credit cards come loaded with technology, in the form of NFC contactless payment ('Tap & Go') and in most cases mobile contactless payment (i.e. they can be used with Apple Pay and Google Pay), plus high security features (chip and PIN, security codes delivered by SMS, fraud monitoring). In these respects 'no annual fee' credit cards do not differ from the most expensive credit cards on the market. But the similarities stop there.

Most credit cards that come without an annual fee also come without reward or frequent flyer points, and without extensive complimentary benefits (e.g. travel insurance, airport lounge access, free flights). They are aimed at the budget end of the market, or beginner credit card users, and are a good way to find your feet in the world of credit cards without spending too much.

However, there are a few – but only a few – rewards and frequent flyer points cards, or cards with some limited complimentary benefits, with no annual fee.

You'll probably benefit from a 'no annual fee' card if...

... you are the sort of person who only intends using their credit card to fund unexpected emergencies such as car breakdowns, occasional online purchases or for when travelling overseas. In this situation a card that doesn’t charge any account maintenance fees can save you a nice chunk of money. Also, if you don’t intend to use your card regularly then features like rewards programs may simply be a waste of time, as you have to spend quite a lot to earn enough for any sizeable return.

And if you're just starting out on your financial journey – a student perhaps, or someone in their first real job – a card with no annual fee is a good way to get used to handling credit without worrying about paying for the privilege of earning reward points. There will be plenty of time for that later.

You probably won't benefit from a 'no annual fee' card if...

... you expect to spend $15,000 or more a year using your credit card, plus you intend to always pay off your monthly account balance in full and you're prepared to keep track of reward points. Spending this amount means that you should be able to earn at least 15,000 reward points per year, even with a slow-earning card, and even if you redeem your points for retail gift cards they should still be worth about $75 (i.e. around 0.5 cents per point). So you could afford to pay a $75-$80 annual fee for a card that may have other valuable benefits attached. And if you think you'll spend more than $15,000, you could unlock points earning and benefits worth well in excess of your annual fee.

Other ways to save money on your credit card

A credit card with no annual fee is not the only 'cheap' credit card. Here are several other types of card you could choose in order to save money:

  • Low interest credit card. This would be a good choice for anyone who expects to carry a balance from month to month, instead of being able to pay off the full balance every month. It's a type of card with an ongoing purchase rate in the range 11%p.a.-14%p.a., rather than the more typical rates of around 18%p.a.-20%+p.a. Your annual interest savings are likely to add up to a lot more than a typical credit card annual fee.
  • Balance transfer offer credit card. Card issuers regularly offer new cardholders the opportunity to transfer a balance from their old card and pay no interest on the transferred amount for an introductory period of between six and 24 months or more. You can save a lot of money this way (slightly eroded if there's a 1%-3% balance transfer fee) as long as you are able to repay the transferred balance in full before the revert interest rate kicks in.
  • 0% purchase offer credit card. Again, this is a promotional offer made to new cardholders by some card issuers. It presents the opportunity to make credit card purchases for an introductory period (typically between six and 15 months) while making only minimum monthly repayments and paying no interest on the balance carried over from month to month during the introductory offer period. Plan to pay off your balance in full at the end of the introductory offer period though, because once again you'll be looking at a revert interest rate if you can't clear the balance immediately.
  • Reward points. This may seem counter-intuitive, because cards with rewards points or frequent flyer points tend to cost more in terms of the annual fee and interest rate. But if you make your card work for you, by choosing a card suitable for your annual spending amount and always paying off your monthly balance in full, you should always save lots more money (by redeeming points wisely and making use of any complimentary benefits) than you will ever spend on annual fees.
  • Cashback card. There are two types of cashback credit cards: those with ongoing cashback (e.g. 1% on all eligible purchases, capped at $30 cashback per month) and those with an introductory offer (e.g. $195 cashback for spending $2,000 on eligible purchases within the first three months after account approval). In both cases you'll receive an actual cash credit to your card account, rather than having to swap points for retail spending vouchers.

Learn about no annual fee credit cards

Find out what the main benefits are and if this is the type of card that suits you.

  • Pros & cons

  • Tips

  • FAQs

A 'no annual fee' credit card saves you money

The primary advantage of a credit card with no annual fee is that you will not have to pay the fee that is charged by the vast majority of cards. It's perfect if you're on a really tight budget.

Great for emergencies

A 'no annual fee' credit card is ideal if you only want to keep it in your wallet for emergencies, like car repairs, unexpected medical bills, or even a cash advance if you have no other alternative. It's a fee-free line of credit.

Good starter card

Students and other credit card first-timers can get used to the idea of owning and using a credit card, without the need to pay a fee.

Rewards and complimentary benefits less likely

Although there are credit cards offering points and complimentary benefits without charging an annual fee, there are very few of them, and the points and benefits are limited. Most 'no annual fee' credit cards have neither reward points nor complimentary insurance or other benefits.

Other features are often more significant than the fee

It's not a good idea to be so fixated on the idea of avoiding an annual fee that you forget to consider a card's other features (or lack of them). A 'no annual fee' credit card is not the best choice for anyone who spends a reasonably large amount on their card, and could make a tidy net profit by earning points and scoring other benefits.

Low interest may be better than no fee

Although you can save money by choosing a card with no annual fee, if you don't expect to always pay off your monthly balance in full you will probably save more with a low rate credit card.

Don't pay an annual fee if you only keep your card for emergencies

Unless you're going to use your credit card regularly, don't choose one where you're going to pay an annual fee. A fee-free credit card will be ideal for you if it's going to emerge from your wallet only rarely.

Minimise your annual fee by choosing a card that matches your spending pattern

There's no point in paying a huge annual fee for a premium credit card if you don't use it often enough to earn sufficient reward points to offset the fee. Similarly, if you do spend a lot using a credit card, opting for a no-frills card without an annual fee means that you will miss out on valuable reward points and benefits.

The trick is to calculate your annual card spending and choose a card that's appropriate. If you're spending $1,000 per month or less, you'd probably be best served by a card with no annual fee. Spending of $1,500 to $2,000 per month should make it worthwhile paying a moderate annual fee in order to access rewards points and benefits, while consistent spending above $2,500 per month should justify splashing out on a premium card (always assuming that you repay your monthly account balance in full).

Some credit cards offer a travel credit equivalent to the annual fee amount

This is another way of effectively getting an annual fee waiver. Just choose one of several cards offering an annual travel credit voucher (with the card issuer's own travel company or airline) for an amount that just happens to be equal to the card's annual fee. 

Some credit cards waive the annual fee if you meet a spending target

If you like the sound of reward points and complimentary benefits, but don't want to pay the large annual fee that often accompanies them, it is possible to get a platinum level card and never pay an annual fee. That's because there are a few cards which offer to waive the fee in any year where you meet a specified spending target. The targets are not usually too onerous ($6,000 p.a., for example).

What does 'no annual fee’ actually mean?

It describes a card without any charges for annual account maintenance. There are obvious money-saving benefits with credit cards that charge zero annual fees, but there is generally a trade-off to be made in that they tend to lack features such as rewards programs. 'No annual fee' cards generally have average purchase interest rates and may also offer a promotional balance transfer rate.

What types of 'no annual fee' cards are there?

Broadly speaking, there are two types of 'no annual fee' credit card:

  • No annual fees for life: This is the main type. These cards charge no annual fee for life, which means you don’t have to worry about switching to a different bank after a year to avoid paying the annual fee.
  • No annual fee for the first year: Before applying for a credit card offering no annual for the first year only, carefully consider whether or not you would be comfortable paying the full annual fee after the offer expires, particularly focusing on whether the benefits the card offers, such as lower interest rates, outweigh the cost of the annual fee.

There are also credit cards with a discounted annual fee that typically only applies to the first year. Just as is the case with offers of no annual fees for the first year, you should consider the cost of the full annual fee you’ll be charged after the first year.

Do cards with no annual fee have rewards programs?

Rewards programs are not as common on cards with no annual fee, but they do exist. However, if you don’t pay off the balance in full every month, the value of the rewards earned can be completely wiped out by the interest you’ll have to pay.

Do cards with no annual fee have introductory sign up bonuses?

You're very unlikely to see a sign-up bonus points offer on a card with no annual fees for life. Very occasionally a bank may couple a sign-up bonus offer with a first year annual fee waiver, but in the current credit card market it's much more likely to be a pairing of a sign-up bonus with a first year annual fee discount rather than complete waiver. 

Can I transfer a balance to a 'no annual fee' card?

Quite a few credit cards without annual fees will have an introductory zero interest (or low rate) balance transfer option available. Take note, however, of the fact that the presence of the transferred balance means that you'll lose your interest-free days on purchases until it's fully repaid, so if you plan to use the card for purchases you could end up paying more in interest charges on purchases than you'll save on the annual fee.

How can I maximise the benefit of a 'no annual fee' card?

To get the most out of it, make sure that you pay off your balance in full each month. Most credit cards with no annual fee for life (except the occasional card with an introductory purchase rate) will charge between 18% and 21% p.a. on purchases balances carried from month to month.

What happens if I miss a payment?

Missing a payment is never a good thing, and it may result in you being charged the annual fee. But worse still, your credit rating may be damaged if you miss one or more monthly payments.

When would the annual fee usually get charged?

Usually banks like to charge the annual fee straight away on the on 1st or 2nd statement of a new card and again on the anniversary of the card approval each year.

Can I earn rewards with no annual fee?

Yes, there are a few cards which offer reward or frequent flyer points without charging an annual fee, but the earning rate will be slow. If you put most of your everyday purchases and bill payments through your credit card, you might actually be better off choosing a card with a higher earning rate, even if you do have to pay an annual fee.

What is the difference between a credit card annual fee and a rewards program annual fee?

A credit card annual fee is a combination of an account-keeping fee (because the bank has employees and systems devoted to assessing applications, tracking transactions, monitoring for fraud, calculating interest charges, producing statements and processing payments) and a partial compensation for the cost to the bank of reward point redemptions and complimentary benefits.

A rewards program annual fee is intended to defray the bank's costs incurred in operating the rewards program: more administrative employees, a dedicated points redemption website, advertising, delivery costs and more. Rewards program annual fees only tend to be charged on cards where the rewards program is an optional extra rather than an obligatory feature, or where there is a choice between the bank's in-house rewards program (usually free) and a third party's frequent flyer points program (fee payable).

Why do some credit cards have no annual fee in the first year?

A first-year fee waiver is simply another form of sign-up incentive, designed to make the card attractive to prospective cardholders. Let's say you were struggling to decide between two cards with very similar features and costs, but one of them had a fee waiver for the first year, allowing you to try out the card free of charge for 12 months. Not a really tough choice, is it? 

Of course, the bank is hoping that you will stick around for the second and subsequent years, when you have to start paying an annual fee.

When is it worth paying an annual fee for a credit card?

Since in most cases a 'no annual fee' credit card usually leaves you neither out of pocket nor with any net earnings or savings, it's worth paying an annual fee only when the net result actually puts money in your pocket. This will be the case when the redemption value of any reward or frequent flyer points earned during the year, plus the cost saving value of any complimentary benefits you actually used during the year, exceeds the amount of the annual fee.

What extras do you get on a credit card with an annual fee?

Credit cards with a low annual fee (around $60 or less) may have no extras at all, except perhaps a low purchase rate on carried over balances and possibly a zero interest balance transfer rate for new cardholders.

A moderate annual fee ( say between $65 and $100) will typically bring you reward or frequent flyer points earned at a slow to moderate rate, and some limited complimentary benefits such as shopper's insurance (extended warranty, purchase protection, lowest price guarantee) and possibly even travel insurance.

Beyond $100 the points earning rate should begin to increase, and both complimentary travel insurance and shopper's insurance will usually be available. Once the annual fee reaches $250, you are looking at a high points earning rate, a full suite of complimentary insurance policies, and possibly more extras like a concierge service and airport lounge passes.

Truly expensive personal credit cards (from $260 to around $1,500) are fully loaded with all the standard benefits plus additional features like free flights or travel credits, full airport lounge membership, elite hotel group privileges, free nights in hotels, and more.

In general terms, the higher the annual fee, the more you recoup in net rewards and benefits value.

Is the annual fee I pay on my card worth it?

If you expect to carry an interest-bearing balance on your credit card, it's certainly worth paying the low to moderate annual fee typically charged by low interest credit cards.

Similarly, it's worth paying an annual fee for a new card with a zero interest balance transfer offer, especially if you have a large balance to transfer and the zero interest rate continues for at least 12 months.

In most cases it won't be worth paying an an annual fee for a card with no reward points or complimentary benefits, if you don't need either a low ongoing purchase rate or a transferred balance at 0% interest. In this case it's only worth paying an annual fee in order to get reward points and/or complimentary benefits in return.

To work out if you will be ahead after paying the annual fee, take a look at your previous year's credit card spending on eligible purchases and multiply the total dollars spent by the card's points earning rate per dollar (or simply look at your points account to see how many points you actually earned). Value your points at 0.5 cents each for reward point (the approximate value if you exchange them for retail spending vouchers) or a conservative 1.0 cents each for frequent flyer points (the minimum you should be able to achieve in flight redemption value). Complimentary overseas travel insurance should be worth at least $250 a year if you are single or $450 for a couple/family, in any year that you use it. Domestic travel insurance could be worth about $300 per year. Add up the value of your points and benefits, which should be much higher than your annual fee cost. If it isn't, you may have a card that is too expensive for your low annual spending amount or non-travelling lifestyle. A less expensive card, with fewer points and benefits, may suit you better.

What is the average credit card annual fee?

A moderate credit card annual fee is around $100. In return you should expect to earn reward or frequent flyer points at a moderate rate and have some limited complimentary benefits, such as overseas travel insurance. If there are no points on offer, there should be more in the way of complimentary benefits, such as the full suite of travel and shopper's insurance policies.

Credit cards with fees lower than this will have either no or very limited points and benefits. Cards with a much higher annual fee should have a high points earning rate and come laden with complimentary benefits.

Why do most credit cards have an annual fee?

Banks need to cover their costs and make a profit out of their credit card business. Much of their revenue comes from fees paid by merchants who accept credit card payments. Another large lump of their profit comes from high interest charges levied on cardholders who carry a balance from month to month. But card issuers make very little profit from cardholders who pay off their balance in full every month and avoid interest charges, so they charge an annual fee to defray their administration expenses and the cost of providing any reward points and complimentary benefits attached to the card.

Does my credit score affect the annual fee?

No. Your credit score may determine whether your application is approved or not, and it may have an impact on the purchase rate you are offered, but it's unlikely to have any effect on the annual fee you are charged. You can check your credit score for free here on Finty.

Is it possible to get the annual fee waived?

Once you've had your credit card for a few years, and have used it consistently for your everyday expenses and bills, and perhaps a few major purchases, it's worthwhile picking up the phone to ring the service centre and request an annual fee waiver. You have nothing to lose, and the person you speak to may have some discretion to grant your request in order to retain your business, especially if you have spent enough to justify the concession. Even if you are not successful, you may instead be given an upgrade to a card with more reward points and benefits for the same annual fee that you are currently paying.