When applying for a new card, it's really important to take the annual fee into consideration. While you usually get a lot of perks and can earn more rewards when you pay a big fee that extra cost doesn't always provide the best value for everyone.
A May 2019 survey from Discover found that 66% of consumers said a credit card's annual fee factors into their selection of it and most people who pay an annual fee reported paying between $51 and $100. And 54% of consumers actively considering switching credit cards stated the number one reason was to avoid paying an annual fee.
Credit cards with annual fees under $100 can still offer competitive rewards, special financing and money-saving perks without the steep costs (upwards of $550) that with a premium card.
Of course, if you don't want to pay anything to have a credit card, there are plenty of good options that have no annual fee.
Here are CNBC Select's picks for the top credit cards with annual fees under $100:
5X miles on hotel and rental cars booked through Capital One Travel℠, 2X miles per dollar on every other purchase, plus 10X miles on thousands of hotels on hotels.com/venture (through January 2020)
50,000 bonus miles once you spend $3,000 on purchases within the first 3 months from account opening
$0 first year, then $95
17.49% to 24.74%
3% for promotional APR offers; none for balances transferred at regular APR
Who's this for? The Capital One® Venture® Rewards Credit Card offers the best rewards rate on select hotel purchases: Earn 10X miles per $1 spent on thousands of hotels on hotels.com/venture through January 2020 (so if you spend $500 on the site, you earn 5,000 miles). If you're looking to take a trip before the end of the year, this is a great way to maximize the amount of miles you can earn.
This card also earns 5X miles on hotel and rental cars booked through Capital One Travel℠ and 2X miles per dollar spent on all other spending, which is a great flat rate. While Venture does come with a $95 annual fee, it's waived during the first year. And $95 is low compared to some other rewards cards, with some annual fees up to $550.
In addition to rewards, every four years cardholders receive a credit for a Global Entry or TSA PreCheck application, up to $100. If you travel often, this is a great perk that can save you time and money.
This card has no foreign transaction fees and comes with a bunch of additional travel perks, such as travel accident insurance, 24-hour travel assistance services and an auto rental collision damage waiver.
*First year rewards total incorporates the points earned from the welcome bonus. When we calculated the first year returns for the Capital One® Venture® Rewards Credit Card, we assumed the cardholder would spend $572 a year on hotel rooms booked via hotels.com/venture. Since the 10X miles offer is only valid through January 2020, we assumed 5X miles for hotel purchases for years 2 through 5. You may earn a higher or lower return depending on your travel spending habits.
$99, waived the first year
3% unlimited cash back on all purchases during the first year; 2.5% on all purchases after
11.99% to 14.99%
Who's this for? If you're looking for a first-in-class cash-back card, then this may be the card for you. The Alliant Cashback Visa® Signature Card offered by Chicago-based Alliant Credit Union really upped the ante when it comes to cash-back rewards. Cardmembers get an eye-popping unlimited 3% cash back during the first year, and 2.5% after that. That's the highest flat rate offered among the options surveyed by CNBC Select.
Another benefit of this card is the easy cash-back program. There's no activation required, no limit on how many points you can earn and you can redeem cash-back for statement credit or deposit into your Alliant checking or savings account at any amount. (There's a $5 minimum opening balance requirement for an Alliant savings account — which Alliant pays on your behalf — and no fee for its checking accounts.)
Alliant says on its website that this card is designed for big spenders, or those who spend $50,000 a year on credit cards, but CNBC Select found the benefits kick in at less than half this amount. If you spend around the same as the average American, roughly $21,852 a year, we calculated the card nets you about $656 during the first year with 3% cash back and $447 each year after. You do need a high credit score to qualify.
While it doesn't offer any welcome bonuses or introductory offers, this card also stands out thanks to its relatively low APR. (Though we do recommend you pay off your card on time and in full each month.) There are also no fees charged on foreign transactions.
Additionally, the card offers a host of useful protection programs, including 90-day purchase protection coverage if a recent purchase suffers harm (like if you drop your new iPhone in water) and travel accident coverage up to $250,000 — protection if you're injured or killed while on the road.
Cardmembers can take advantage of up to $5,000 in personal identity theft protection, free roadside assistance and rental car collision insurance, so you don't have to spend extra money next time you rent a car.
The biggest downside to the Alliant Cashback Visa® Signature Credit Card is that it does have a $99 annual fee that kicks in after the first year, though you can easily make up for the cost thanks to the strong 3% cash back program.
You also have to become a member of Alliant Credit Union and open an account. The easiest way to become a member is by supporting Alliant's partner charity, Foster Care to Success. You don't need to pay the charity directly — Alliant pays $5 on your behalf when you apply to join the credit union. Membership is also open to family members of current members, employees of partner organizations or those who live or work in qualifying towns and communities near Chicago's O'Hare International airport.
Overall, the numbers indicate that it's worth it to overcome these relatively minor obstacles in order to get the card's generous cash-back rate on all your purchases. If you don't want to make that trade off, though, consider one of the other highly rated cards below.
2X points on travel and dining worldwide, 1X points on all other purchases
60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening — worth up to $750 toward travel when you redeem through Chase Ultimate Rewards®
17.49% to 24.49%
Either $5 or 5% of the amount of each transfer, whichever is greater
Who's this for? The Chase Sapphire Preferred® credit card is one of the best travel cards available with a competitive rewards program and generous welcome bonus. Cardholders earn 2X points on travel and dining worldwide and 1X points on all other purchases.
This card stands out from the pack thanks to the strong rewards rate when you redeem points for travel via Chase Ultimate Rewards®. Points are worth 25% more, so 60,000 points are worth $750 towards travel. This is a great way to maximize the value of points and the welcome bonus.
Beyond rewards, cardholders can benefit from helpful travel perks, such as no foreign transaction fees, trip cancellation/interruption insurance, auto rental collision damage waiver, travel and emergency assistance services, baggage delay insurance and trip delay reimbursement.
*First year rewards total incorporates the points earned from the welcome bonus
6% cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations, 3% cash back on transit including taxis/rideshare, parking, tolls, trains, buses and more and 1% cash back on other purchases
$250 statement credit after you spend $1,000 on eligible purchases on your new Card within the first 3 months
0% APR for the first 12 months on purchases and balance transfers
14.49% to 25.49%
3%, $5 minimum
Who's this for? The Blue Cash Preferred® Card from American Express offers one of the most competitive welcome bonuses: Earn $250 after you spend $1,000 on eligible purchases within the first 3 months from account opening. That's like earning 25% cash back!
Frequent grocery shoppers will be happy to learn the Blue Cash Preferred® Card from American Express offers the highest cash-back rate at U.S. supermarkets at 6% (on up to $6,000 per year in purchases, then 1%). The average American can earn $301 in cash back each year when they do their shopping at qualifying supermarkets.
If you want to maximize cash back on groceries, this card is for you. In addition to high grocery rewards, there's an unlimited 6% cash back on select streaming subscriptions, unlimited 3% cash back at U.S. gas stations, unlimited 3% cash back on transit including taxis/rideshare, parking, tolls, trains, buses and more and 1% cash back on all other purchases.
Cardmembers can also take advantage of Amex Offers, where users earn a statement credit or additional cash back at select retailers. For example, a recent offer gave you $25 back each month (up to three times), if you spent $70 or more a month on Sun Basket meal kit delivery. These limited-time offers are location-based and additional terms apply.
This card does come with a $95 annual fee, but it can be offset by the cash back you earn and discounts you can get through the Amex Offers.
3X points on travel, 2X points on dining, 1X points on all other purchases
Earn 30,000 bonus points when you spend $3,000 in the first 90 days
$0 the first year, then $75
0% for the first 12 billing cycles on balance transfers made in the first 90 days of account opening
12.74% to 18.00%
Who's this for? The Odyssey Rewards World Elite Mastercard® from First Tech® Federal Credit Union provides a great opportunity to consolidate your credit card debt, while still earning rewards on everyday purchases. Cardholders benefit from a 0% APR for the first 12 billing cycles and no balance transfer fee (after that it's a lower-than-average 12.74% to 18.00% variable). Balance transfers must be completed within 90 days from account opening to qualify for the interest-free financing period. (Don't want to pay? Check out CNBC Select's round-up of best balance transfer cards, which offer a variety of choices with no annual fee.)
Cardholders can earn rewards on new purchases with 3X points on travel, 2X points on dining and 1X points on all other purchases.
The Odyssey Rewards World Elite Mastercard® also comes with premium travel benefits, such as worldwide travel accident and baggage delay insurance, trip cancellation and trip interruption coverage, travel assistance services and roadside assistance.
This card requires membership to First Tech Federal Credit Union, but anyone can join. Qualify through affiliation with select organizations or employers, a relationship with a current member, working or living in Lane County, Oregon, attending Cogswell Poly Technical College or by joining the Community History Museum (CHM) or Financial Fitness Association (FFA). First Tech pays the membership fee for the CHM and FFA on your behalf.
To determine which credit cards offer the best value with a low annual fee, CNBC Select analyzed 50 of the most popular credit cards offered by the biggest banks, financial companies, and credit unions that allow anyone to join and have annual fees under $100. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fees and foreign transaction fees, as well as factors such as required credit score and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.
CNBC 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 2018 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 $21,852 in retail spending. This budget is comprised of the most common spending categories, including groceries ($5,019), gas ($2,394), dining out ($3,365), travel ($2,154), utilities ($4,959) and general purchases ($3,961). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.
CNBC 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 Preferred® Card from American Express, click here.