# Best credit card with no (or low) fees?



## Wishful_Aspirations (Apr 3, 2010)

Hi Everyone,

I'm shopping around and looking for a new primary credit card to use for my purchases.

I've been using a MasterCard issued by Sears for the longest time, and I have a really decent credit limit on it as well (just bumped up to over 10K recently)

It doesnt have any fee's, and until about a year ago I thought it's reward program was pretty decent.
I liked the fact that you could redeem it for things like Petro-Canada Gas cards using points earned. 
I made an effort to put most of my purchases on it, and every couple of months I'd treat myself to a free tank of gas 

However about a year ago, they changed their rewards program and now all you can do it redeem for actual Sears gift cards...
Nothing against sears... but it's kind of mehhh...

I've never had a CC with fee's before, however am willing to consider it if the benefits could quickly outweight the costs.
And would look for something with a decent variety of rewards to redeem.

Anything you guys would recommend based on your experience?

Thx


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## GeniusBoy27 (Jun 11, 2010)

This has been discussed before, and FP has a link somewhere in here (if not on his website, Million Dollar Journey), but I like MBNA's Platinum Reward Card with Cash Back, 1% (with 3% on gas/groceries up to $600, 5% on gas/groceries for the first 6 months). 

There's also an AMEX 2% Cash Back card with a $99 annual fee.


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## m3s (Apr 3, 2010)

Smart Cash is free and it's pretty good. Some fee cards have worse rewards, some have better if you travel a lot but there's always annoying hoops to jump through just to redeem your points and they expire etc etc (or the card ends or gets changed before you're done collecting points etc) I'm done with points - love my cash back


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## Larry6417 (Jan 27, 2010)

I agree with the MBNA Platinum Smart Cash. It will return 3% (5% for the first 6 months) of cash for purchases at a grocery store or gas station up to a limit of $600 per month. After $600 it returns 1% - all for no annual fee. If you apply through Great Canadian Rebates, you'll get a $60 rebate immediately. See www.greatcanadianrebates.ca/


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## Jungle (Feb 17, 2010)

MBNA Smart cash. With the cash you can reward yourself however you want. We take the cash and invest it or pay debt.


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## Phil-Carney (Aug 11, 2011)

Jungle said:


> MBNA Smart cash. With the cash you can reward yourself however you want. We take the cash and invest it or pay debt.


I am curious on how a banking institution sets an interest rate. Is it done with the going rate of the Bank of Canada key interest rate? Say 3 points over key rate? 

I hope this message is not too off topic but it does seem related.

-Phil


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## Elbyron (Apr 3, 2009)

MBNA Smart Cash is for sure the best no-fee card, but is not necessarily the best overall reward card or even cash-back card. Getting 3% back on gas & groceries is great, but if you don't spend that much on those things you're probably only averaging 1.2 - 1.4% return. 
For example, if you spend 25K annually but only $3600 on gas & groceries ($300/month), then you'll get cash back of $322, which works out to 1.288%. 
Taking another example of a bigger family, spending 40K annually and always hitting the max $600/month for gas & groceries. They would get back $544, which is 1.36%. For a no-fee card, a return of 1.36% is pretty good... but the OP said he would consider an annual fee if it increased rewards, and that is exactly what is needed to beat the Smart Cash card.

The Capital One Aspire World Mastercard is "what's in my wallet". I use it to get a 2% return on all my spending, by redeeming the points on any travel charge over $600 (you can redeem for less but will likely not get 2% value). But what many people don't realize is that even if you don't travel, this is an excellent cash-back card as well. You can redeem 10,000 points for a credit of $75, and since you earn 2 points for each dollar spent, that means $5000 spending is worth $75, and therefore works out to 1.5% cash-back without factoring in the annual fee. It does cost $120/year, but you get a 10K point renewal bonus, worth $100 toward travel or $75 cash-back. And supplementary cards are free!
So taking another look at the examples above, the 25K spender could use Aspire to earn a $500 travel credit or $375 cash back, minus the annual fee of $120, plus the renewal bonus, brings the net reward to $480 or $330. This is higher than the Smart Cash card even if you just use it for cash-back!
In the 50K example, Aspire's net return is $980 travel or $705 cash-back... way more than the $544 from Smart Cash.
As for benefits, the Aspire is fully loaded. The best ones are: 22-day travel emergency medical insurance, trip interruption/cancellation, baggage loss/delay, price protection (up to $100 if lower price found within 60 days), extended warranty of up to 2 years, theft protection on purchases for 120 days. 
So what's the downside? Well, for starters you have to have an income of $70K or more to qualify... or be willing to lie and say that you do. And if you want to get the full 2% return, you'll have to save up enough points to cover a travel purchase of $600 or more. Alternatively you can go through the hassle of getting the airline or travel agent to split the charge into separate transactions with one of them being exactly $150 or $350. But if you don't travel, or are too impatient to save up enough points & don't want any hassles, you can always take the 1.5% cashback option.

Here's a formula that will help you decide if Smart Cash or Aspire is your best choice. 
A = annual spending on the card
G = monthly amount spent on gas & groceries, but if this is over $600 just put in $600.
T = use 0.02 if you would use Aspire for travel, or 0.015 for cash-back

(A + 5000)*T -120 - (A*0.01) - (0.24*G) = ?
If you get a positive number, that represents how much more the Aspire will earn you per year. Negative means Smart Cash will earn you more.

Note: The calculator in Windows 7 when used in standard mode will not obey order of operation rules. Either change it to scientific mode, use parenthesis exactly as shown, or use some other calculator. I was shocked when I punched in 3+3*3 and it told me 18! Microsoft must have figured that their typical user failed grade 3 math.

Edit: Others have mentioned that Smart Cash has a sign-up bonus of getting 5% gas & groceries for 6 months, which is potentially worth an extra $72. But if you sign up for Aspire through Red Flag Deals before Aug 16th you'll get 50K points, worth $500 toward travel or $375 cash-back. After Aug 16th the standard sign-up is 35K points ($350 or $262.50).


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## Struggs (May 5, 2011)

Another vote for MBNA Platinum Smart Cash MasterCard here.


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## Wishful_Aspirations (Apr 3, 2010)

Thanks everyone!

I think I'll proceed with filling out an application for the MBNA Platinum Smart Cash MasterCard!!


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## atrp2biz (Sep 22, 2010)

The Aspire card has other great perks as well and is what I use.

1. If while traveling, your flight is delayed for any reason for over four hours (re: volcanic eruption in Iceland), Aspire will provide up to $250 per day for food and accommodations.

2. I think it's 22 days of travel insurance for the cardholder, spouse and dependents.

3. Price match of up to 90 days after purchase.

For no fee cards, I used to use the Citi Driver's Edge which provided rewards at 2% of spending for use towards a vehicle purchase/lease. I also used the Starwood Mastercard (I think this preceded the Platinum Cash back card if memory serves).


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## Sampson (Apr 3, 2009)

I wonder what people's effective rates of rebate are? As Elbyron points out, depends on what you spend money on. 

We usually get 1.2% - 1.3% cash back - that's on about $20k spending per year - on a Costco tiered cash back AMEX.


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## Elbyron (Apr 3, 2009)

Sampson said:


> I wonder what people's effective rates of rebate are? As Elbyron points out, depends on what you spend money on.
> 
> We usually get 1.2% - 1.3% cash back - that's on about $20k spending per year - on a Costco tiered cash back AMEX.


Correct me if I'm wrong, but doesn't the Costco Amex card that gives you the "tiered up to 1.5%" cashback have a $50 annual fee? If so, then your net reward on 20K spending is reduced from $245 to $195, and thus is gaining you only 0.975%. 

If you downgrade your Costco Amex to the free one (for use at Costco only), and use a Smart Cash card everywhere else, you would probably get around $225 - $275 on 20K spending - depending how much gas & non-Costco groceries you buy - and no annual fee.
Or if you get the Aspire card, and use it for cashback only, you could be getting $255 per year (after fee & bonus). If used for travel, then $380 per year. That's 1.9% return after the fee is factored in.

I spend around 30K per year on my Aspire, and only redeem for travel, so my overall return net of fees and bonuses is usually close to 1.93%.


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## Sampson (Apr 3, 2009)

No fee, but we do have a Costco Gold membership or whatever that is called.

I guess we shop at Costco enough to make it 'free'


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## Elbyron (Apr 3, 2009)

Sampson said:


> No fee, but we do have a Costco Gold membership or whatever that is called.
> 
> I guess we shop at Costco enough to make it 'free'


Ahh. I think I previously misunderstood how the Costco Amex cards work. For some reason it looked like you needed to have the Executive membership in order to get the Platinum card, and so I figured that extra membership cost was basically like an annual fee. But it turns out you can get the Platinum with either the gold or executive Costco membership, and in fact you can stack the 2% from the executive membership with the 1.5% of the platinum card to get 3.5% back on purchases made at Costco. Of course, the executive level only pays for itself if you spend $2250 or more per year at Costco.

But despite Costco's card having no fee, the return on 20K is still $10 less than using Aspire for cashback, and $135 less than using Aspire for travel.


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