Why would anyone pay for something they can get elsewhere for free? In a recent survey, 60% of consumers rated not having to pay an annual fee as “very important” when choosing a credit card. Yet in the same survey, 37% said they were “very satisfied” with their annual fee cards.

What’s going on here? While a substantial majority prefer not to pay an annual fee, which we might expect, over a third are happy to do so. Why? What are the fee-based cards offering that makes customers willing to pay for them?

The three most common answers are member perks, cash-back rewards, or the ability to build credit. Cards that offer cash back or similar incentives typically come with an annual fee. Consumers are “paying to play,” so to speak. Many, however, are doing so unaware that there are no-fee options for those who want perks or need to do a bit of credit building.

1. Cards for Rebuilding Credit


One of the easiest ways to build a credit score is by using and consistently paying off a credit card. You can click here and read about different apps that can help you build and monitor your credit.

Unfortunately, consumers lacking a solid credit history often struggle to get approved. Typically, the cards available to them come with substantially higher APRs and/or an annual fee attached.

Nowadays, though, consumers can use a credit card to build credit, such as Chime, which charges no annual fee. It requires no credit check, thus offering those with a poor credit score an opportunity to start rebuilding. For consumers trying to establish a foundation of credit for a better financial future, Chime’s card might be a good choice.

2. Cards That Offer Cash Back on Everyday Purchases

If you’re working to rebuild credit, you might also try using your card for smaller, everyday purchases. By avoiding big-ticket items, you keep your monthly bill manageable and easier to pay off in full. Getting in that habit will rapidly boost your credit rating.

Increasingly, consumers are beginning to expect perks for using their card on smaller purchases, but not all issuers provide the same benefits. Many cards still limit the rewards they offer to certain types of purchases.

In contrast, cards like Discover it® allow you to earn a percentage back anytime you make a purchase, large or small. Cards like this one are worth considering when shopping for low-maintenance benefits.

3. Cards Tailored to College Students


Low-maintenance cards are perfect for students as well. College students need a card that lets them build credit while they’re still in school — without charging an arm and a leg. Banks, for their part, have caught on to the need to help students build a credit rating not tied to a parent’s.

The Bank of America® Cash Rewards Credit Card for Students is one card designed to meet the specific needs of the college crowd. This card offers a 0% APR for 12 months and customizable cash-back options. Students get rewards for purchases such as gas and groceries, which they might be purchasing with their own money for the first time.

The collegiate set will also appreciate the ability to manage their accounts using a free phone app. Ready access to financial information helps make the initial steps toward personal fiscal responsibility simpler and more approachable.

4. Cards That Offer Rotating Bonuses

If you place a high value on flexibility, a card that offers rotating benefits might be worth a look. Cards like the Chase Freedom Flex allow you to accrue benefits in a variety of areas. You’ll build points and rewards on travel, food, and other purchases. The rotation categories reward you with 5% cash back, which is typically more than similar cards.

5. Cards With No Minimum Spending Requirement


Some cards require that consumer spending hit a predetermined threshold before the rewards begin to kick in. To avoid disappointment, it’s best to check the fine print to verify that you aren’t signing up for a reward you may not get.

Spending minimums might prove to be a barrier for some cardholders, especially those who want to keep their monthly bill manageable. New cardholders and those with a poor credit history are probably better off not giving themselves any incentive to spend more. For these folks, the Citi® Double Cash Card could be a good choice. It provides 2% cash back on every purchase, no matter how modest.

6. Cards That Offer Travel Rewards

Many cards allow users to rack up reward points for airfare and hotel stays. Of course, most of us have been forced to curtail travel plans since the pandemic began. However, a travel rewards card can give you the chance to build up points while you wait.

The Wells Fargo Propel American Express® card is a good entry-level card for those who love to travel. The points earned using this card carry the same value regardless of how they are redeemed, making the value of those rewards easier to understand. Cardholders earn points for travel, transit, dining, and even major streaming services. If you’re itching to travel once it’s safe to do so, this card is definitely worth a look.

7. Cards for Small Business


If you own a small business, your financial needs are likely much different than those of the frequent traveler or college student. A no-fee card such as the Ink Business Cash® Credit Card may work well for your company if your spending patterns match bonus categories. This is a great way to build up reward points for purchases your business makes anyway.

Allowable categories can vary from card to card, so get a firm grip on where your business spends its money before you shop cards. You’ll rack up points faster if you authorize other employees to use the card as well. Of course you’ll want to make sure employees know when and for what purposes the company-issued card can be used.

The majority of us looking for a no-fee credit card don’t want to sacrifice the many benefits of fee-based credit cards. Fortunately, it is possible to build credit, start our financial journey, and earn some rewards along the way — without an annual fee. Use this guide to begin your own research, and resist the urge to pull the trigger too soon.