Most prestigious credit card with no annual fee

Cash-back credit cards can be a great way to make money off your normal spending, but if you don't want to pay an annual fee in order to reap rewards, there are plenty of options without a yearly charge.

To help you get the right card for your needs, we analyzed 44 popular cash-back cards without an annual fee using an average American's annual spending budget and digging into each card's perks and drawbacks to find the best of the best based on your consumer habits.

It's no wonder these cards are popular choices as you can potentially earn hundreds of dollars in cash back by simply using one of these cards for your everyday purchases.

Here are Select's top seven cash-back credit cards with no-annual-fee:

Best no annual fee cash-back credit cards of 2022

• Winner: Chase Freedom Unlimited® Card
• Runner-up: Citi® Double Cash Card
• Best for rotating bonus categories: Chase Freedom Flex℠
• Best for online shopping: PayPal Cashback Mastercard®
• Best for foodies: Capital One SavorOne Cash Rewards Credit Card
• Best for groceries: Blue Cash Everyday® Card from American Express
• Best credit union: PenFed Power Cash Rewards Visa Signature® Card

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Winner

Who's this for? Consumers who want a robust rewards card with no annual fee should consider the Chase Freedom Unlimited® Card. Cardholders earn 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% on drugstores and dining at restaurants (including takeout) and 1.5% on all other purchases.

If you're looking to maximize your rewards, there's also a generous welcome offer: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back.

This card has no annual fee, and you can benefit from a 0% APR for the first 15 months on new purchases and balance transfers (after, 17.99% - 26.74% variable APR). There's an intro balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, it's either $5 or 5% of the amount of each transfer, whichever is greater.

Runner-up

Who's this for? Cardholders who want to earn cash back without a lot of fuss should consider the Citi® Double Cash Card. This card set the standard for flat-rate cash-back cards when it hit the market in 2014 and is still one of the best on the market.

You can earn 2% cash back on all purchases — 1% when you make a purchase and an additional 1% when you pay your credit card bill. Cardholders can redeem the cash back for statement credits or a check once they've earned $25 worth of rewards.

The card is also good for anyone looking to consolidate their debt: The Citi Double Cash Card offers an introductory 0% APR for the first 18 months on balance transfers (then 16.99% - 26.99% variable APR). There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first four months of account opening. After that, your fee will be 5% of each transfer (minimum $5). And if you have debt on another Citi-branded card, you can't transfer it to the Double Cash card.

This card isn't so great for travelers, as it comes with a 3% foreign transactions fee and cash back can't be redeemed for travel purchases.

Best for rotating bonus categories

Who's this for? If you're looking to maximize rewards, consider a rotating bonus category card like the Chase Freedom Flex℠. This card offers 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate, then 1%. Check out the full Chase Freedom cash-back calendar.

In addition to rotating rewards, you can earn 5% cash back on travel booked through the Chase Ultimate Rewards® portal, 3% cash back on dining at restaurants and at drug stores and 1% cash back on all other purchases.

You can benefit from World Elite Mastercard benefits, such as cell phone protection and Fandango credits. Plus, the Freedom Flex card has no annual fee and offers a competitive 0% intro APR for the first 15 months on new purchases and balance transfers (after, 17.99% - 26.74%  variable APR). There's an intro balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that it's either $5 or 5% of the amount of each transfer, whichever is greater.

Best for online shopping

Who's this for? Fans of PayPal and frequent online shoppers will want to check out the PayPal Cashback Mastercard®. It's another 2% cash-back card that lets you earn the same amount of rewards on all purchases. A PayPal account is required to open this card, but if you don't have one yet, no worries — accounts are free.

This card links to your PayPal account, which is great if you're a fan of the platform since your rewards can be applied directly to your PayPal balance. But this may be a hassle for people who don't like PayPal or want other cash-back redemption options, such as gift cards and travel rewards. On the other hand, it's great for fans of online shopping, as PayPal is accepted by millions of online retailers.

While the PayPal Cashback Mastercard® cash-back program is competitive and earns you the same amount of rewards as the Citi® Double Cash Card, this card doesn't offer any welcome bonus or introductory 0% APR offers, which is why it comes behind the Citi® Double Cash Card and the PenFed Power Cash Rewards Visa Signature® Card.

Best for foodies

Who's this for? Foodies and entertainment junkies can maximize rewards with the Capital One SavorOne Cash Rewards Credit Card, which provides one of the highest cash-back rates on dining and entertainment purchases at 3%.

Plus, this card has one of the best welcome bonuses on the market: If cardholders spend $500 within the first three months of account opening, they earn a $200 bonus — that's like earning 40% cash back.

Additionally, cardholders who need to finance upcoming purchases or refinance debt can benefit from 15 months of no interest (after it's a 17.99% - 27.99% variable APR; 3% fee on the amounts transferred within the first 15 months). Capital One notes on its site that this is a card for people with excellent credit (read more about credit scores here).

The SavorOne Cash Rewards Card also offers a slew of other perks, such as access to exclusive entertainment events (concerts, food experiences, sporting events) and no foreign transaction fees.

Best for groceries

Who's this for? The Blue Cash Everyday® Card from American Express is a competitive no-annual-fee card* for grocery shoppers. You earn 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%).

You can also earn 3% cash back at U.S. gas stations, (on up to $6,000 per year, then 1%), and a standard 1% cash back on all other eligible purchases.

This card comes with access to Amex Offers, which provides statement credits or a chance to receive additional rewards when shopping at select retailers. These limited-time offers are location-based and additional terms apply.

You can also use this card to finance new purchases thanks to a 0% intro APR offer on purchases and balance transfers for the first 15 months from the date of account opening (then, 17.74%-28.74% variable APR; there's a balance transfer fee that's either $5 or 3% of the amount of each transfer, whichever is greater). (*See rates and fees)

This card is also a good alternative to its counterpart, the Blue Cash Preferred® Card from American Express, which offers 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%) — but with a $0 intro annual fee for the first year (then $95). (See rates and fees.)

Best credit union

Who's this for? The PenFed Power Cash Rewards Visa Signature® Card is a solid card for someone interested in being a part of a credit union. With this card, you can earn a $100 bonus after you spend $1,500 in the first 90 days from account opening. Cardholders get 1.5% cash back on all purchases, but that increases to 2% cash back on every purchase if you're a PenFed Honors Advantage member (which requires a qualifying checking account or military affiliation).

PenFed is a credit union, so membership is required to open a card. Anyone can join by applying, opening a savings account with a $5 deposit and maintaining a $5 account balance.

To earn the higher cash-back rate, you need to become an Honors Advantage member in one of several ways: be in an active military service status, a member of the Reserves or National Guard, an honorably discharged U.S. military veteran or retired from such service; be the primary owner on both the credit card and checking accounts of any existing open PenFed product (excluding PenCheck Limited accounts); or open a new Access America checking account (which requires a daily balance or monthly direct deposit of $500 or more to waive the $10 monthly service fee).

Cardholders can redeem their cash back for statement credits, deposit it into their PenFed account or transfer it to another financial institution.

Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.

Bottom line

Cashback credit cards are a solid way to save on your everyday purchases without any hassle of redeeming rewards for travel. And the best part is that cash back rewards aren't taxable, according to the IRS. So you can take those savings and deposit them directly into your emergency fund or even further pad your brokerage account.

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FAQ's about cash back credit cards with no annual fee

Select analyzed the most frequently asked questions from consumers. Here are the answers to help you make the best decision possible when choosing a cash-back credit card with no annual fee.

What does no annual fee mean?

No annual fee means that you will not be charged an annual fee for simply holding a credit card. Many high-end rewards credit cards charge annual fees, which you'll need to pay to keep the account open.

When is a credit card annual fee worth it?

An annual fee is worth it when you're able to extract more value from the card than you pay for the annual fee. For example, if you earn $500 per year in cash back from a card with a $95 annual fee, than it'll be worth it to pay the annual fee since you're coming out $405 ahead.

Why do some credit cards have an annual fee?

These cards typically earn more rewards and may have other benefits, like travel credits and airport lounge access, than those with no annual fee. This fee is charged so credit card issuers can offset the cost of the rewards issued.

Can you get a no annual fee credit card with bad credit?

Yes, many credit cards for bad credit have no annual fee.

Are no fee credit cards worth it?

Absolutely. Just because a credit card has no annual fee doesn't mean it's not worth it.

Our methodology

To determine which cards offer the best value, Select analyzed over 44 of the most popular cash-back credit cards available in the U.S. that don't come with an annual fee. We excluded cards that have no annual fee but require a membership fee.

We compared each card on a range of features, including cash-back rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit score and customer reviews when available. We also considered additional perks, application process and how easy it is for the consumer to redeem points.

Select teamed up with location intelligence firm Esri. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.

Esri's data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.

Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.

It's important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)

Our final picks are weighted heavily toward the highest five-year returns, since it's generally wise to hold onto a credit card for years. This method also avoids giving an unfair advantage to cards with large welcome bonuses.

While the five-year estimates we've included are derived from a budget similar to the average American's spending, you may earn a higher or lower return depending on your shopping habits.

For rates and fees of the Blue Cash Everyday® Card from American Express, please click here.

For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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