Credit cards with annual fees often come with better offers, better rewards, better perks, and better insurance.
But what if you could get all the benefits of a premium credit card for free? Credit cards that have first year free offers allow you to do exactly that.
These offers let you have a premium credit card for a whole year before you’re charged an annual fee.
Curious to know more?
The best first year free credit card offers
|Card name||Great for…||Annual fee||Apply now|
|BMO AIR MILES World Elite Mastercard||Earning AIR MILES and shopping at Costco||$120||Apply|
|BMO World Elite Mastercard||Travellers who want 4 free lounge passes and flexible reward lovers||$150||Apply|
|BMO Cashback World Elite Mastercard||Getting straighforward cash back rewards on all purchases||$120||Apply|
|Scotiabank GM Visa Infinite||Super high returns and Chevy lovers||$79||Apply|
|Scotiabank Momentum Visa Infinite||Big grocery and bill spenders – the highest cash return for these categories||$120||Apply|
|TD Aeroplan Visa Infinite||A huge welcome bonus and perks on Air Canada rewards flights||$120||Apply|
|TD Aeroplan Visa Platinum||Earning Aeroplan miles with low income requirements||$89||Apply|
|TD First Class Travel Visa Infinite||Flexible travel rewards that can be used through ExpediaForTD||$120||Apply|
|TD Travel Visa Platinum||A big sign-up bonus with low income requirements||$89||Apply|
|TD Cash Back Visa Infinite||Complimentary roadside assistance and 3% cash back for gas, groceries, and recurring bill purchases.||$120||Apply|
Pay no fee for the first year
Some offers might seem too good to be true, but first year free offers often benefit both the cardholder and the card issuer.
Taking advantage of these offers is your chance to take a premium credit card for a test drive and answer the following questions before making an annual fee commitment:
- Will my spending justify the fee?
- Does the card suit my needs and my spending?
- Will I get any use of the perks offered by the card?
- Does the bank have a user-friendly website and mobile app?
- Is the credit card’s customer service helpful?
With a free year of card ownership, you’ll hopefully be able to answer all of these questions and get a good idea if you want to take on the annual fee.
This free period is also good for the issuer – it’s a way for them to reach customers who wouldn’t normally apply for a card with an annual fee.
And at the end of the year, they either hope you’re impressed enough with the card that you’ll want to stick around, or that you won’t be bothered enough to cancel your card.
My first year is over, now what?
A year without an annual fee is great, but what should you do when your free year is up?
First, you’ll need to decide if you want to keep the card or not.
If you answered the above questions and feel pretty good about the card, you might see that the annual fee is worth it – you’re probably getting more rewards in the long run anyway.
Or maybe you’re not super happy with the card and think you’d be better off with a lower annual fee.
Here are some tips on how to navigate moving forward.
Negotiate your annual fee
If you want to hang on to the card, you could try using the power of persuasion.
Simply call customer service and see if there’s a way you could negotiate your annual fee.
Be honest – let them know you like the card but you’re not sure you can justify the high annual fee.
Remind them that you always pay your bill on time and would be happy to stay with them as a loyal customer.
Be friendly and sincere…the worst that could happen is they say no.
Downgrade to the no fee version
If you’re happy with the rewards you’ve earned and want to keep letting them pile up, you could simply switch to the no fee or lower fee version.
This way you can keep the rewards you earned in your first year and, although you won’t earn as many rewards with your lower fee card, you’ll continue to earn on every purchase you make.
Here are some popular premium credit cards and their no fee counterparts:
|Premium version||No fee version|
Shop around for a card that suits you better
Or maybe you want to get a new credit card – a card that’s the perfect fit for you.
Not sure how to find the perfect card?
We’ve developed a credit card matchmaking quiz that:
- takes less than 3 minutes,
- takes your personal preferences and spending into account,
- makes recommendations based on your choices.
Would you like to know which credit cards are right for you?
Take our Rate Your Wallet quiz to find out.
When it makes sense to pay an annual fee
You know that old saying “You gotta spend money to make money”?
When it comes to credit cards, sometimes that really is the case.
No one likes paying fees, but there are times when having a card with an annual fee will give you more rewards than the no fee version – even after factoring in the fee.
Even if you’re not a huge spender, if you put the majority of your purchases on your credit card, having a card with an annual fee could still make sense.
As an example, we took a few premium credit cards and put them against their no fee counterparts to find out the tipping point – ie. the point when upgrading to the premium version would make sense.
For most of these cards, the tipping point is surprisingly low.
|No fee version||The tipping point||Premium version|
|$1,100 a month|
|$820 a month|
|$640 a month|
|$1,105 a month|
|$900 a month|
|$400 a month|
Please note: These numbers were calculated based on a typical spend breakdown without maximizing any spending categories.
Depending on your spend, these numbers could be even lower.
But, wait – there’s more! If you’re only using your Scotia cash back card on recurring bills or grocery purchases, the tipping point number goes down to only $333 a month. At that point, you might as well upgrade to the
Grab one of these offers before it’s gone
One thing you should know about first year free credit card offers is that they don’t last forever.
If you see an offer that interests you, you might want to apply before it’s too late.
Have you ever taken advantage of a first year free credit card offer?
Did you stick with the card when your free year was up?
Let us know in the comments below.