No annual fee credit cards

Get a credit card with no annual fee but still enjoy a range of perks and benefits.

By   |   Verified by Yvonne Taylor   |   Updated 10th January 2022

Comparing no annual fee credit cards

Scotia Momentum Visa Infinite Card

Scotia Momentum Visa Infinite Card

Balance transfer

6 months at 2.99% p.a.

Purchase rate

20.99% p.a. ongoing

Annual fee

$0.00 for 1st year

Highlights

  • No annual fee for the first year, including supplementary cards ($120 and $50 p.a. respectively thereafter).
  • Earn cashback on groceries, recurring payments, gas and everything else.
  • Enjoy Visa Infinite Concierge Service.
Tangerine World Mastercard

Tangerine World Mastercard

Balance transfer

6 months at 1.95% p.a.

Purchase rate

19.95% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • 1.95% p.a. for 6 months on balance transfers (3% balance transfer fee applies). Reverts to cash advance rate of 19.95% p.a.
  • 2% Money-Back Rewards on purchases in two categories of your choice or deposit your Rewards into a Tangerine Savings Account and get a third 2% Money-Back Category.
  • No limit on the amount of Money-Back Rewards you can earn on your everyday purchases. Conditions apply.
SimplyCash Card from American Express

SimplyCash Card from American Express

Balance transfer

N/A

Purchase rate

19.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • New SimplyCash Card from American Express Cardmembers can earn 4% cashback on purchases (up to $200 cashback) for the first 6 months of Cardmembership.
  • Earn 1.25% cashback on purchases when your Welcome Rate ends.
  • Enjoy Travel-Related and Shopping Insurance Coverage.

Bank promo

  • Earn 4% cash back in your first 6 months (up to $200 cash back).
Tangerine Money-Back Credit Card

Tangerine Money-Back Credit Card

Balance transfer

6 months at 1.95% p.a.

Purchase rate

19.95% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • 1.95% p.a. for 6 months on balance transfers (3% balance transfer fee applies). Reverts to cash advance rate of 19.95% p.a.
  • Earn 2% Money-Back Rewards on your everyday purchases in two 2% Money-Back Categories of your choice, and 0.50% Money-Back Rewards on all your other everyday purchases.
  • Get your Rewards deposited into your Tangerine Savings Account and get a 3rd 2% Money-Back Category.
  • No limit on the amount of Money-Back Rewards you can earn on your everyday purchases. Conditions apply.
BMO CashBack Mastercard

BMO CashBack Mastercard

Balance transfer

9 months at 1.99% p.a.

Purchase rate

19.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • Earn 3% cash back on grocery purchases, 1% cash back on recurring bill payments such as mobile phones, and 0.5% cash back on all other purchases, so every time you spend, you earn.
  • Give your financial health a boost with online and mobile banking tools. Enjoy more control over your credit card and a better understanding about how you’re using it.
  • No annual fee.

Bank promo

  • Get up to 5% cash back in your first 3 months.
  • 1.99% introductory interest rate on Balance Transfers for 9 months with a 1% transfer fee.
BMO AIR MILES Mastercard

BMO AIR MILES Mastercard

Balance transfer

9 months at 1.99% p.a.

Purchase rate

19.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • Earn 3 AIR MILES Reward Miles for every $25 in purchases at participating AIR MILES Partners and 1 Reward Mile for every other $25 you spend on eligible credit card purchases.
  • Collect your Miles in your Cash Account and instantly use them in-store towards your purchases or get an e-voucher to use at participating Reward Partners.
  • No annual fee.

Bank promo

  • Get 950 AIR MILES Bonus Miles (that’s enough for $100 towards purchases with AIR MILES Cash).
  • 1.99% introductory interest rate on Balance Transfers for 9 months with a 1% transfer fee.
BMO Rewards Mastercard

BMO Rewards Mastercard

Balance transfer

9 months at 1.99% p.a.

Purchase rate

19.99% p.a. ongoing

Annual fee

$0.00 p.a. ongoing

Highlights

  • Earn 1 BMO Rewards point for every $1 spent and redeem them with our most flexible rewards program – merchandise, travel, pay with points and more.
  • Get 2x BMO Rewards points and up to 25% off rentals at participating National Car Rental registered single-cross and Alamo Rent a Car registered double-cross locations.
  • No annual fee.

Bank promo

  • Get 15,000 points when you spend $1,000 in the first 3 months.
  • 1.99% introductory interest rate on Balance Transfers for 9 months with a 1% transfer fee.§§

Overview

Credit cards with no annual fees are a good idea if you're on a budget or are just starting to build up your credit. Another good reason you might want to go with no fee credit cards in Canada is if you don't plan on using the card much and only really need it for emergencies.

The reason that a no annual fee credit card is an attractive option is because it usually includes rewards that the no-fee credit card doesn't, or only has to a lesser extent. These benefits include attractive rewards points systems and higher payouts in terms of cash back rewards. However, an annual fee can be expensive, especially if you're paying it on top of interest charges, and this is when having no annual fee to pay can seem like practical solution.

Benefits of no annual fee cards

The best no fee credit cards in Canada have a number of benefits you can take advantage of, beyond having no annual fee. This includes travel points with purchases, cash back options, low interest rates and no foreign transaction fees. While these benefits may be on a lower scale than fee-paying cards and will vary depending on the card you sign up for, it's easy to find a credit card that suits your needs but doesn't charge an annual fee.

Some cards also include a welcome bonus when you first sign up. This sign up bonus can range from high points for the first six months to a larger cash back amount for a set period of time on certain purchases. While the welcome bonus is a nice benefit, you should consider your long term needs and pick the card that best suits what you're looking for in the future.

But the main benefit is still the absence of an annual fee, making this option great for students or people starting their first job, or anyone who doesn't use a card enough to cover the annual fee cost in rewards points or cash back value.

You still have to make payments

There's no such thing as free credit cards, even if you are looking for a no-fee credit card. When we say "no fee" we're referring to the annual fee that a lot of credit cards have attached to them. This doesn't mean that your credit card is automatically a free credit card, as you would still have to pay interest on any balance that carries over from month to month. But if you pay off your balance in full every month, are never late with payments and avoid cash advances, the only fee you might run into is a foreign transaction fee.

Now that you have a better idea of what no fee credit cards are about you can appreciate the importance of sticking to a payment schedule. This essentially means you need to make a point of paying your credit card bill when it falls due, and avoid over-spending.

The reason you don't want to have a large amount carrying over each month is because interest is charged on the outstanding balance, which gets added to the interest on your purchases in the next month. That's because carrying a balance means that you lose your interest-free days on new purchases. This accumulated interest can result in a higher bill as each month passes, which can quickly get out of hand.

Annual fee payment schedule

You will normally be charged an annual fee in the first monthly statement after you open the card account, and then once a year on each anniversary of account opening.

Annual fee waivers

If you already have, or would prefer, a card with an annual fee and better rewards, you have nothing to lose by asking for an annual fee waiver. Just phone the card provider's service centre and ask for the waiver based on your record of expenditure with a credit card. The bank won't want to lose the merchant fees it earns from your purchases, and the call centre personnel may have discretion to waive the fee to keep your business if your expenditure is high enough.

Some credit cards offer new cardholders an automatic annual fee waiver in the first year.

Alternatives to no annual fee credit cards

If you don't want to use a no annual fee credit card, but are looking for the same payment convenience, you have several alternatives to choose from.

High rewards credit card

The first option is obviously a card with an annual fee. This is a good choice if you're looking for a card that has high rewards, a low interest rate or a significant welcome bonus. While the annual fee can vary depending on the type of credit card you're looking for, the cost is usually outweighed by the rewards if you use the card enough.

Prepaid card

The best part of a prepaid credit card is you don't have to worry about an annual fee or interest rates. You just go to the store and buy the prepaid card already loaded with a cash balance. Once the card is ready to go, you can use it anywhere traditional cards are accepted. This includes both brick-and-mortar stores and online shopping.

Debit card

If you have a check or transaction account in Canada you likely have a debit card. These cards allow you to withdraw money from your bank account at an ATM, as well as make purchases at a store checkout and online. There are no annual fees when it comes to a debit card, but you may have a fee attached to using it depending on the type of account it is linked to.

Learn about no annual fee credit cards

What is the benefit of a credit card with no annual fee? Are they worth it?

  • Pros & cons

  • Tips

  • FAQs

A good second card for Amex users

A no-fee card is a sensible option for anyone whose primary card is an American Express card. Amex cards may not be accepted everywhere, but if you have a no-fee Mastercard or Visa in your wallet, you have a low-cost backup in case your primary card is not acceptable.

Fewer additional perks

While some credit cards have perks like free insurance, airport lounge access and rental car discounts included, as well as other benefits, no-fee credit cards tend to have fewer perks like this.

Fewer rewards

While you do get rewards when signing up for no-fee credit cards, they aren't as attractive as rewards attached to credit cards that have an annual fee.

Save money

The first benefit is the most obvious one, in that you don't have to worry about paying a fee every year just for owning the card. This is especially attractive if you're on a tight budget, are just starting out with your first card, are looking for a secondary card, don't plan on using the card much, or just want to avoid paying extra fees.

Try before you buy

Before committing yourself to a particular card issuer, you may want to try their no annual fee card for size. You can find out how good their service is and how easy it is to manage your card account online, before moving on to one of their fee=paying cards.

Welcome bonus

The welcome bonus is typically a promotion that's designed to attract new users to the card. A welcome bonus expires after a set period of time has passed and can include perks like thousands of extra points for reaching a spending target, extra cash back percentages and more. Just make sure you read the terms of the welcome bonus to make sure you understand what you're getting once the promotional period has elapsed.

You can still get rewards

Just like fee-based credit cards, these cards often have rewards attached to them that you can earn when using the card. These include rewards like cash back percentages, point systems, and waived foreign transaction fees. Of course, the rewards vary depending on the card issuer, so you'll need to do your research before diving into a specific card.

Don't pay an annual fee for an emergency-use-only card

If you only want to have a credit card to give you access to funds in an emergency – such as unexpected car repairs or medical bills – there's no point in paying an annual fee for the privilege. Opt for a basic card with no annual fee.

Do your research

No matter what rewards the lender is offering, you should always do your research when it comes to choosing a credit card. You have to find out what other fees might exist besides the waived annual fee, as well as look into interest rates and how long any welcome bonus might last. You should also learn about any terms and conditions that might apply to your card, because these could be different from cards with an annual fee.

Match up the card with your lifestyle

The first thing you need to do when looking for a credit card is to figure out what you want to use it for and how it lines up with your lifestyle. If you're on a tight budget, a cash back credit card with no annual fee could be the way to go. If you expect to carry a balance on your card from month to month, choose a no annual fee card with a low interest rate. A rewards points card could work well if you spend quite a lot on credit card purchases, and a card with travel rewards like airport lounge access or free travel insurance could suit regular travelers.

Use a two-card strategy

Another good way to get the most from your card without an annual fee is to pair it with a card that has an annual fee. What you're doing here is using the rewards tied to the specific cards that most benefit you. For example, if the card with no annual fee has restaurant cash back rewards of 3%, but your annual fee card only has restaurant rewards of 1%, you would use the no annual fee card to get the extra rewards. Having the extra card in your wallet costs you nothing.

Do all credit cards have an annual fee?

No. While the vast majority of credit cards do charge an annual fee, there are plenty of options without one. Cards that don't charge an annual fee usually have fewer benefits than those that do, but not everyone spends enough on their credit card to take full advantage of the benefits.

Some credit cards with an annual fee will waive the fee in the first year.

Do I have to pay the whole annual fee if I close my account before a year is up?

Under normal circumstances you may be refunded for the portion of the year that remains after you closed your account. But you will need to check the card's terms and conditions to find out if this is the case.

How do I get a no annual fee card?

If you're interested in signing up for a card with no annual fee you just need to apply online after comparing your options and choosing the most suitable card for you. You'll need to provide identity information so the lender can perform a credit check, as well as details of your income and citizenship or residency. Once you're approved for the card it will be mailed to your nominated address.

Is a no annual fee card good for rebuilding credit?

While a no-fee card will save you the cost of the annual fee, it may not be an option if you have a lower credit score because you may not get approved for the card. A better option to rebuild your credit would be to apply for a secured card. Secured credit cards are easier to get approved for and are generally considered to be one of the best ways to rebuild your credit.

Is it worth paying an annual fee?

If you put as many of your expenses and bill payments as possible onto your card, it's certainly worth paying an annual fee for a card that will earn you rewards points or air miles at a faster rate. In this situation you should be able to earn points or miles worth far more than the cost of the annual fee every year. But if your annual card purchases are low – less than $5,000 – you may be better off not paying an annual fee and accepting a lower points earning rate, or no points at all.

What other fees apply to a no annual fee card?

While you don't have to worry about any annual fees with this type of card, you do have other fees you may need to pay depending on how you use your card. These fees can include a balance transfer fee, a late payment fee, an over-limit fee, a cash advance fee, a foreign transaction fee, a returned payment fee, and a card replacement fee.

Which is the best no fee credit card in Canada?

The best card for you is the one that offers the greatest convenience for paying for purchases and managing your account, while delivering the highest level of rewards points or other complimentary benefits to suit your lifestyle, all while charging no annual fee. Compare your options and choose one that you are likely to be approved for based on your income and credit score, and with benefits that you can actually use.