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A no annual fee credit card costs nothing to hold each year, which makes it the cheapest card to keep if you pay the balance in full or use a card only occasionally. The trade-off is usually fewer extras: lower or no rewards, fewer complimentary insurances, and sometimes a higher purchase rate than a dedicated low rate card.
No annual fee doesn't mean no fees. This guide covers the fees that still apply, cards that swap an annual fee for a monthly one, and how to decide between a $0 card and one with a fee.
By Better Rate Mate Editorial Team · Last reviewed
Moneysmart's checklist of card costs applies to every card, whatever the annual fee:
| Fee | When it's charged | How to avoid it |
|---|---|---|
| Late payment fee | The minimum repayment isn't made by the due date | Automatic repayment of at least the minimum |
| Cash advance fee (plus interest from day one) | ATM withdrawals and cash-like transactions | Don't use a credit card for cash |
| Overseas or foreign transaction fee | Purchases in a foreign currency or processed overseas, including some online stores | Use a card without these fees for travel |
| Over-limit fee | Only if you've expressly agreed to go over your limit | Don't opt in |
| Rewards program fee | Some cards charge separately for rewards | Check whether rewards are included |
| Monthly fee | Some cards charge a monthly fee instead of an annual one | Compare the yearly total |
Some cards advertise no annual fee or no interest but charge a monthly fee. CommBank's Neo card, for example, charges a monthly fee that varies with the credit limit ($15, $20 or $25 a month for $1,000, $2,000 or $3,000 limits, as listed on CommBank's site on 28 September 2026), and no monthly fee in a statement period with no processed transactions where the previous closing balance was paid in full. That can be good value for someone who carries a balance, but it is not a $0 card. Multiply any monthly fee by 12 before you compare.
If you carry a balance most months, the rate matters more than the fee; compare with low rate cards. If you spend a lot and pay in full, a card with a fee can still come out ahead; the break-even method shows how to check.
Some do, usually at a lower rate or with tighter caps than fee-paying cards. Since 1 October 2026 the RBA's cap on consumer credit card interchange fees has fallen from 0.8% to 0.3%, and the RBA has said interchange shouldn't fund rewards programs. Rewards on no-fee cards have always been thin because they rely heavily on that revenue, so expect them to be modest and check that the program hasn't changed recently. See rewards vs cashback cards.
A "first year free" offer is a fee-paying card with a discount, not a no annual fee card. The full fee arrives in year two. Put the date in your calendar and decide then whether to keep, downgrade or cancel. Moneysmart's cancellation checklist: redeem points, move direct debits, pay the card to $0 and get written confirmation.
It is if you pay in full each month and wouldn't earn enough rewards to cover a fee, or if you rarely use the card. If you carry a balance, the interest rate matters more than the fee.
Yes. Late payment, cash advance and foreign transaction fees can all still apply, and some cards charge a monthly fee instead of an annual one. Over-limit fees can only be charged if you've expressly agreed to them.
Some no annual fee cards earn rewards, usually at a lower rate or with caps. The RBA cut the interchange cap on consumer credit cards to 0.3% from 1 October 2026, which puts pressure on card rewards, so check current terms.
You can ask; the bank decides. If it won't, compare switching to a $0 card, remembering that a new application adds a credit enquiry to your report.
For someone who pays in full every month, any card with no annual or monthly fee and no rewards fee costs nothing. For someone who carries a balance, the cheapest card is the one with the lowest combined interest and fees on that balance.
We don't list cards or quote issuers' rates, fees or earn rates: they change often and we don't have a live product feed. Average rates are the RBA's published figures for the month shown. Before you apply, read the card's key facts sheet and Target Market Determination, which set out its actual rates, fees and interest-free days.
Card types, fees, interest-free days and credit limits, explained in one place in ourguide to comparing credit cards. When you're ready, tell us how you use a card and we'll match you on rate and fees.
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