Having a credit card can be both convenient and rewarding. However, high annual fees can be off-putting for most Canadians. That's where no-fee credit cards come in.

What is a No Fee Credit Card?

As the name implies, a no-fee credit card does not require you to pay an annual fee. These credit cards allow holders to enjoy the conveniences of a credit card without paying the typical $120 - $199 yearly fee. No-fee credit cards often have few requirements, so most applicants are approved.

Common Features and Benefits

Despite having no yearly fee, no fee credit cards offer holders good rewards programs. Some cards allow you to earn rewards for everyday purchases that you can redeem for cash back, travel, and transfers to other loyalty programs.

For instance, you can earn 2% cashback on everyday purchases with the Tangerine Money-Back Credit Card. You get this benefit and more without having to pay an annual fee.

Some no-fee credit cards offer 24-hour customer service, rental car discounts, or fraud protection. You pay no annual fee, so these benefits make these cards worth the bet.

Pros and Cons of No Fee Credit Card

There are a few advantages and disadvantages of no-fee credit cards worth noting before you apply.

The Pros of No Fee Credit Cards

• No annual fee. This is the primary advantage of this card. You can save the standard annual fee charged on credit cards.
• Access to premium benefits. One would think a credit card without an annual fee would be barebones, but that’s not always the case. Most no-fee credit cards offer great rewards programs and lucrative welcome bonuses.

The Cons of No Fee Credit Cards

• Lack of comprehensive travel insurance. While no-fee credit cards come with great rewards perks, they lack certain benefits, like insurance. So if you travel often, a no-fee credit card may not be suitable for you.
• Lower rewards earning potential. Although some no-fee credit cards have rewards programs, they're often not of a high value. Cards with an annual fee often earn more rewards per dollar.
• No annual fee and high-interest trade-off. No-fee credit cards still have regular interest charges and other credit card fees. Therefore, you must use your card responsibly and pay your balance off every month.

Choosing the Right No Fee Credit Card for You

Before applying for a no-fee credit card, consider these pointers to choose the best card.

1. Look out for annual fee waivers. Some credit cards waive the annual fee for the first year. Afterwards, you’ll have to pay the standard annual fee. So make sure the $0 annual fee is permanent and not an introductory offer.
2. Review the interest rates and surcharges. Although there’s no annual fee, some cards carry high-interest rates on purchases, cash advances, and balance transfers. Make sure you check these out before applying for a card.
3. Check that you meet the eligibility requirements. Some no-fee credit cards require you have a certain minimum income.
4. Read the fine print. As with every credit card, make sure you review the terms and conditions.