Credit cards with no annual fee are a great way to build your credit, start learning about rewards, and keep costs down.
Here are our recommendations for budget-conscious credit card users looking for the best no-fee credit cards in Canada.
Best No Fee Credit Cards
Best Overall No Fee Credit Card
- Earn 5,000 MBNA Rewards points upon spending $500 in the first three months
- Plus, earn 5,000 MBNA Rewards points for opting into electronic statements
- Also, earn 4x MBNA Rewards points on restaurants, grocery, digital media, membership, and household utilities in the first three months
- Then, earn 2x MBNA Rewards points on restaurant, grocery, digital media, membership, and household utilities
- Use your points for any travel bookings available on MBNA Rewards
- Annual fee: $0
Among no-fee credit cards, the MBNA Rewards Platinum Plus Mastercard has it all.
Compared to other cards with no annual fee, it has a high welcome bonus, a high base earn rate, and high bonus earn rates on spending in popular categories. For a card with no annual fee, there’s not much more you could ask for.
The card also offers a birthday bonus, where you receive an extra 10% bonus in points up to 10,000 points yearly, which is another plus about this card.
Unfortunately, as of August 2021, the extensive insurance coverage the card used to provide has been removed, with improved earning opportunities replacing it.
While you won’t get outsized value for your rewards, your points are very flexible, and can be used for any travel booking available on the MBNA Rewards portal. You can redeem at a flat rate of 1 cent per point for travel, or 0.83 cents per point for statement credit.
Best Premium No Fee Credit Card
- Earn $25 cash back upon first purchase
- Plus, earn 1.5% cash back on all purchases
- Also, earn bonus cash back to offset the foreign transaction fee on USD purchases
- Minimum income: $80,000 personal or $150,000 household
- Annual fee: $0
If you prefer to only carry one credit card at a time, the Rogers World Elite Mastercard is the card for you. It’s one of the rare Mastercards at the premium World Elite level that comes with no annual fee.
The card earns 1.5% cash back on all purchases. This rate is the de facto benchmark for other World Elite Mastercards, and very lucrative for a card with no annual fee.
Also, the card gives higher rewards on US-dollar purchases to offset the foreign exchange fee. This gives you peace of mind not to worry about extra costs if you’re doing any online shopping on US sites or going for a jaunt over the border.
As a premium credit card, you’ll get some travel benefits, like 10 days of emergency medical coverage if you’re under the age of 65. The card’s insurance package won’t blow you away, but it’s very useful considering it doesn’t cost you anything.
Whether you like the simplicity of only using one card, or a high earn rate on uncategorized spending at no extra cost, there’s a place for the Rogers World Elite Mastercard in every wallet.
Alas, there’s one caveat: you do need to spend $15,000 per year on the card to maintain your World Elite tier, so it’s much better as your primary card than as a backup card that only sees occasional use.
Best Aeroplan No Fee Credit Card
- Earn 10,000 Aeroplan points upon first purchase
- Plus, earn
0.67x1x Aeroplan points on gas, groceries, and Air Canada purchases
- Aeroplan preferred pricing on Air Canada flights
- Minimum income: $15,000 personal or household
- Annual fee: $0
While not great for daily spending, it has a welcome bonus of 10,000 Aeroplan points for making your first purchase. For no annual fee and no spending requirement, you’d be hard-pressed to find an easier way to earn towards a free flight!
As for Aeroplan benefits, you’ll get a modest discount (8–15% on most routes, by our calculations) on Aeroplan flight rewards for Air Canada flights thanks to the preferred pricing benefit for cardholders.
If you’re an avid collector of Aeroplan points, then by holding onto the no-fee CIBC Aeroplan Visa Card in perpetuity, you can ensure you’ll always receive the preferred pricing discount on all Aeroplan rewards – even if you decide to switch up your other higher-tier Aeroplan cards in the future.
Aside from that, the biggest advantage of this card is that your Aeroplan points will never expire as long as you keep the card open and active.
It’s also a great way for young adults to get started with collecting Aeroplan points. If you can’t qualify for the card or don’t meet the $15,000 annual household income requirement, CIBC offers an identical card just for students.
Best Lifestyle No Fee Credit Card
- Earn 2% cash back on restaurants, entertainment, transit, and recurring bill payments
- Up to 15% discount on car rentals at Hertz, Dollar, and Thrifty
- Mobile device insurance
- Annual fee: $0
If you’re always on the go, the Desjardins Cash Back Mastercard ticks all the boxes. You’ll get 2% cash back on restaurants, transit, entertainment, and recurring expenses, with no limit to the amount of bonus rewards you can earn in those categories.
There are other no-fee cards out there with higher rewards on those categories, but they impose a cap on bonus rewards after just $500 spent per month. If you routinely spend more than $500 per month at restaurants and bars or on take-out, for example, you’ll likely come out ahead with this card instead.
Desjardins also offers an identical no-fee Visa product, but we’ll give the nod to their Mastercard for being accepted at a slightly higher number of stores, including Costco.
Best No Fee Credit Card for Roadside Assistance
4%15% cash back on your first purchase at Canadian Tire, up to $333 spent
- Then, earn 4% cash back at Canadian Tire stores
- Plus, earn 3% cash back at grocery stores
- Free Canadian Tire Roadside Assistance Gold Plan
- Annual fee: $0
The Canadian Tire Triangle World Elite Mastercard is the only card with no annual fee that also offers roadside assistance. For commuters or road-trippers, this is a great free perk that can save you a lot of money compared to an annual auto club membership.
With this card, you get a free membership for the Canadian Tire Roadside Assistance Gold plan. It includes unlimited calls for 24-hour assistance, towing to the destination of your choice within 250 kilometres in Canada and the US, and services such as fuel delivery, flat tire changes, and jumpstarting your battery.
This package is more flexible than what you get from other credit cards that offer roadside assistance, which often won’t tow you as far or as often. When you’re in a pinch, you’ll want the best help available, and half measures just won’t cut it when it comes to car trouble.
As for rewards, the card earns 3% back as Canadian Tire Money on all grocery purchases up to $12,000 spent per year, and 1% back everywhere else. If you shop frequently at Canadian Tire or their affiliated brands, this no-fee card would also be quite strong for everyday use.
Best No Fee Credit Card with Flexible Categories
- Earn 10% cash back in the first 12 months, on up to $1,000 spent
- Then, earn 2% cash back on two categories of your choice
- Plus, get an extra bonus category when you redeem your rewards into a Tangerine Savings account
- For your bonus rewards, choose from groceries, furniture, restaurants, hotel/motel, gas, recurring bill payments, drugstores, home improvement, entertainment, or public transportation and parking
- Mobile device insurance when you buy your phone with the card
- Minimum income: $60,000 personal or $100,000 household
- Annual fee: $0
Most credit cards lock you into preset categories for bonus rewards. The Tangerine World Mastercard goes the other way, and lets you choose two categories (or three with a Tangerine Savings Account) for the 2% cash back rate.
If you’re trying to maximize your earning rates on as many categories as possible, it’s best to pick ones that cover for the weak spots on your other credit cards. You can also adjust your categories once every three months. This could be very handy if you want to take advantage of a one-off expense in a category that doesn’t have bonuses on any other cards, such as home improvement or furniture stores.
As an added bonus, the Tangerine World Mastercard comes with mobile device protection and rental car insurance, both nice benefits on a no-fee card. Plus, you’ll get Mastercard perks for travellers like LoungeKey membership and Boingo Wi-Fi.
If you don’t meet the thresholds of $60,000 annual personal income or $100,000 annual household income, you can instead apply for the Tangerine Money-Back Credit Card. It has the exact same rewards structure, but lacks insurance and travel benefits.
Best No Fee American Express Credit Card
- Earn 10,000 MR points upon spending $1,000 in the first three months
- Plus, earn 1x MR points on all purchases
- Transfer points to airlines or hotels
- Amex Offers and cardholder benefits
- Annual fee: $0
If you’re looking to add an American Express to your wallet without paying an annual fee, the American Express Green Card would be the best choice, earning 2 MR points per dollar spent on Amex Travel bookings and 1 MR point per dollar spent everywhere else.
That’s a stellar rate for a no-fee card, even better than what you’d earn for uncategorized transactions on many cards that come with annual fees!
Plus, you’ll get all the benefits of being an American Express cardholder, like Amex Offers, Front of the Line event presale tickets, and exclusive invites to other events.
No Fee Credit Cards: What You Need to Know
When choosing a no-fee credit card, you should familiarize yourself with what benefits a no-fee credit card can offer, what features to look out for, and how no-fee credit cards can fit into an optimized overall credit card strategy.
Why get a no-fee credit card?
No-fee credit cards can be useful for anyone. They’re easier to get approved for if you’re younger, earning a lower income, or just starting out building your credit history.
They also enable you to earn basic rewards for free – that way, you’ll always be earning something, even before you’ve learned the ins and outs of how to maximize your rewards points.
Even once you’ve moved your daily spending to cards with better rewards, it’s good to keep a few no-fee cards open and in good standing.
This helps to improve your credit score by keeping your average age of accounts high (which makes up 15% of your score). Also, with a bit of extra unused credit on these cards, your utilization rate (which makes up 30% of your score) will remain lower, which has a major impact on stabilizing your credit score.
As it’s not costing you anything, there’s really no downside. After all, it’s better to have credit and not need it, than to need it and not have it.
What should you look for in a no-fee credit card?
Credit cards with no annual fee generally don’t have as many benefits as higher-end cards. The earn rates and welcome bonuses don’t come close, but there are a few hidden gems for budget-conscious cardholders looking for perks.
Look for credit cards issued by retail stores and smaller financial institutions. These companies offer a few premium-tier credit cards with no annual fee.
In doing so, you can often find high rewards rates or strong perks that compete with what the big banks offer – but usually not both on the same no-fee card.
In particular, some no annual fee cards offer insurance. The packages aren’t as strong as the ones you’ll see on top-tier cards, but some cards offer surprisingly generous coverage for free.
If you have a premium card and decide you’re no longer getting good value for its annual fees, see if you can downgrade it to a no-fee variant with the same bank. Most premium cards have an entry-level version that earns the same type of rewards. By switching, you can keep your points from expiring, which is helpful in case you don’t have plans to use them immediately.
Finally, if you want to try out the benefits of a higher-end premium card but aren’t ready to commit to an ongoing annual fee, many popular cards have ways to reduce or eliminate the annual fee.
You can find signup offers that waive the fee for the first year, bank accounts that include a credit card fee waiver, or cards with annual credits that offset the fee.
What’s the optimal strategy for no-fee credit cards?
No-fee credit cards typically play a small but significant role in a savvy credit card user’s wallet, especially if you’re interested in maximizing your credit cards to travel better.
After all, credit cards with annual fees typically come with stronger welcome bonuses, higher earning rates, and more meaningful benefits. The rewards can often outweigh the annual fee, in which case it makes sense to pay the annual fee to get the card.
In comparison, no-fee credit cards are more limited in their rewards, so the potential upside of a no-fee credit card isn’t too appealing compared to more fulsome credit card products that do command a fee.
If you’re primarily looking to avoid annual fees as you optimize your credit cards, keep in mind that there are ways to get credit cards that do have annual fees without necessarily having to pay for the annual fee.
You could take advantage of First Year Free welcome offers on a variety of credit cards, earning the welcome bonus and enjoying the cards’ benefits in the first year, before deciding after one year whether you’d like to pay the second year’s annual fee.
You could also leverage bank accounts that waive credit card fees in order to avoid paying a credit card’s annual fee on an ongoing basis, year after year.
You could also adopt a strategy like cashing out some of your points on a premium travel credit card to offset the annual fees, and then using the remaining points to fund your travel expenses.
This way, you’re never paying more out-of-pocket than you need to, and you’re using your pure “net winnings” from your credit cards to make your travels go further.
Having said that, there is one very significant role for no-fee credit cards even for individuals who aren’t hesitant to pay an annual fee when it’s worthwhile: keeping a few no-fee cards open in the long run to support your credit history.
After all, 15% of your credit score is made up of the “average age of accounts” (AAoA) criterion, so you always want to have a few accounts that you’re keeping open forever in order to keep your AAoA as high as possible.
Credit cards with annual fees may not make sense to keep forever. Your preferences might change over time, or you might decide that the card’s benefits no longer justify the annual fee, and thus need to cancel the card.
On the other hand, no-fee cards are ideal to keep around forever without really having to think about them. After all, it’s not costing you anything year after year, just a tiny transaction for good measure to keep the account active.
If you’re looking to optimize your credit card portfolio towards your travel goals, you’ll have the greatest success with the best travel credit cards that do have annual fees, but you’ll always want to have a few no-fee keeper cards open to strengthen your credit score over time.
Frequently Asked Questions
Below are some questions we frequently hear from readers about the best no-fee credit cards in Canada.
What’s the difference between no-fee cards and First Year Free cards?
First Year Free is a welcome bonus promotion: you’ll pay no annual fee for the first year, but you’ll be charged the regular annual fee starting in your second year with the card.
For these credit cards with no annual fee, you’ll never be charged.
Is anyone eligible for a no-fee credit card?
Not necessarily. These cards are often easier to qualify for and most are aimed at the bottom of the market, but that doesn’t mean that they’re always an automatic approval.
Some banks offer specific products like secured cards for people with new or poor credit history, student cards, or even no-fee World Elite Mastercards with a high income requirement.