- Annual fee: $0
- Interest rates: 19.99%, cash advances 22.99%, balance transfers 22.99%
- Welcome bonus: $25 cash back when you make your first purchase
- Earn rate: 1.5% cash back on all purchases; 3% cash back on all U.S.-dollar purchases
- Income requirement: $80,000 individual, $150,000 household
- Additional benefits: Out-of-province/out-of-country emergency medical insurance; trip cancellation/interruption protection; rental car collision/damage coverage; access to over 1,000 LoungeKey airport lounges in over 100 countries with Mastercard Airport Experiences; free Boingo Wi-Fi at over 1 million hotspots worldwide; and Mastercard Travel Rewards
- See cards tailored for you from over 12 banks and card issuers*
- No impact to your credit score
- Get an answer in under 60 seconds
Advantages of a no-fee credit card
The main advantage of a no-fee credit card is exactly what the name suggests: There’s no fee. This means that unless you’re carrying outstanding debt, using the card costs you nothing. The appeal of a free card is obvious, but there are some things to consider, not the least of which is that no-fee credit cards typically offer far fewer benefits and perks than cards that carry an annual fee. More on that below, but first let’s look at some of the top reasons why a no fee option might be best for you:
- You’re a student or just starting out
Everyone needs to establish credit. Starting out with a no-fee card lets you build up credit and understand your spending habits before you consider moving on to a card with an annual fee.
- You’re a light credit user
Cards that carry a fee often have other valuable benefits or rewards—perks that offset the upfront cost with enough use. If you don’t foresee yourself spending enough to make back the cost of the annual fee, a no-fee card may be the better choice.
- You already have a fee card
There are lots of reasons to carry a second no-fee card as a back-up. You could use an American Express with a fee as your main card, but what about places that don’t accept Amex? Or maybe you carry a rewards card with a fee and chose a no fee cash back card. It’s not a bad (or costly) idea to have a no-fee card in your wallet.
No-fee cards come with fewer frills
One major drawback to no-fee cards is that, with few exceptions, they lack the perks and benefits—particularly insurance—that’s offered by many cards with an annual fee. Typically, no-fee cards do include very basic protections such as zero liability, purchase protection and extended warranty, but you’ll likely miss out on travel medical emergency insurance and rental car collision coverage and on perks such as airport lounge access. Ultimately, you’ll have to weigh these benefits against the fees and decide whether a no-fee credit card works best for you.
More about credit cards
For the best cash back credit cards 2022 ranking, MoneySense tapped into Ratehub.ca’s‡ credit card tool and calculated the numbers for both fee and no fee cash back rewards cards based on $2,000 in monthly spending. We used the following scenario: $500 on groceries, $200 on gas, $200 on restaurants, $125 on bill payments, $175 on travel, $225 on entertainment, $75 on pharmacy purchases and $500 on everything else.
The end game was a magic number—that is, the annual net reward in dollar terms to identify the top cash back cards for each type of spender. Our methodology also took into consideration other factors, including limited-time accelerated earn rates, the range of spending bonus categories, annual fee waivers, purchase protections and travel insurance perks.
‡MoneySense.ca and Ratehub.ca are both owned by parent company Ratehub Inc. We may be partnered with some financial institutions, but this does not influence the “Canada’s Best Credit Card” rankings. You can read more about this in our Editorial Code of Conduct.