Can you get cash back cards with no annual fees?

Cash back credit cards return to the card holder a certain percentage of the sum spent on the card, usually between 0.5% and 1% of the card spend. They are popular with people who pay off their balance in full every month and who tend to spend a lot of money on the card regularly. This can be especially useful for employees who front expenses for a company, to be reimbursed later.

Cash back cards make their profits through the merchant fees that credit card companies charge shops for processing transactions. The cash back element is a way of sharing that merchant charge with the card user.

There are some cash back cards offered with no annual fees, but they are reasonably rare. These cards tend to require a higher credit score from applicants than similar cards with an annual fee, and they also tend to carry a higher interest rate. The cash back amount may also be a smaller proportion of the fee. These cards can be withdrawn with reasonable frequently.

To make up for charging an annual fee, other cash back cards may offer an enhanced cash back for certain types of goods, such as groceries and petrol, or for purchasing certain brands. They may offer an introductory period with a considerably higher cash back amount for the first three months the card account is active, sometimes as high as 5% of the credit card spend in those months. However, the cash back amount returns to the standard level after this introductory period is over.

Those cash back cards with no annual fee tend to be most useful for people who never carry a balance on the card, paying off the debt with each monthly statement. If a person does carry a balance for more than a month, the savings from cash back and no annual fee are likely to be quickly negated by the interest charged on that balance.