A lighter wallet: no annual fees, still great rewards


“Never pay an annual fee to use your money”. That’s what I was raised to believe about credit cards. My parents meant well. Despite the fact that my own beliefs have clearly diverged from that more than a bit over my years of immersing myself in credit card rewards, the truth is that carrying unnecessary cards is such a common problem in this hobby that we created a Youtube show to provide credit card interventions (we kicked it off by helping Jim eliminate almost three thousand dollars in annual fees).

Stephen's wallet 1
How much is too much?

Recently, I shared the contents of my current wallet to note the fact that every credit card I’m carrying today is different than the cards I had in my wallet six months ago. I caught flack from one reader who suggested that, for most people, the small bump in rewards isn’t worth rotating expensive credit cards (and I can agree with the fact that most people shouldn’t have all of the same cards that I do as a blogger who writes about credit cards). While that reader’s point was that it makes more sense to work on a big welcome bonus or to manufacture spend for points than worry about bonus categories, his or her point about having many expensive credit cards actually brought me back full circle to my upbringing as I pondered the question: “What would be the ultimate no-fee wallet?” That is to say that if I were to eschew a strategy of chasing premium credit cards with big category bonuses, what kind of wallet could I construct to maximize rewards without paying a dime in annual fees? This post is my answer to my own question.

Note: This is but one strategy

In this post, I lay out what I think is the ultimate no-fee wallet, but it’s not the only no-fee wallet one could construct. Notably omitted here (with a couple of exceptions) are many of the rotating category cards. I left out most of those cards simply because I don’t know which categories they’ll bonus in the year ahead, so I didn’t know where to put them in the list. My main aim here was to find a keeper card for each category in which I regularly spend money that I could keep for solid returns year-round — and as such, a rotating category card that offers the ability to choose your own categories or offers a year-round bonus in a worthwhile category was easier to identify as a long-term keeper than one that may or may not offer categories I need in any given quarter.

Coincidentally, my wallet can comfortably hold up to six credit cards — and that is exactly the number I came to for the no-fee-dream-team wallet below.

a group of credit cards
Note: You see 7 cards here, but that’s because of the fact that I’d put either the Freedom or Freedom Unlimited in the wallet as noted below — so only six cards make the final cut.

Dining: US Bank Altitude Go

Card Name w Details & Review (no offer)
FM Mini Review: This card offers solid return on dining - including takeout & delivery - and no annual or foreign transaction fees. That makes it a great option for those who prefer cash back.

No Annual Fee
Earning rate: 4X take out, food delivery (including apps like GrubHub, UberEATS, etc), and dining ✦ 2X grocery (including meal kit delivery), gas stations, and streaming services
Base: 1X (1%)
Dine: 4X (4%)
Gas: 2X (2%)
Grocery: 2X (2%)
Card Info: Visa issued by USB. This card has no foreign currency conversion fees.
Noteworthy perks: $15 credit for annual streaming services ( after 11 months of consecutive streaming service charges, the 12th month will get the $15 credit)

My largest discretionary expense most years is dining. In a year without a global pandemic, we tend to eat out at least once or twice a week and sometimes more. We also enjoy the occasional over-the-top foodie experience like The French Laundry, Alinea, Eleven Madison Park, etc.

The US Bank Altitude Go fits the bill if you want to pick up the check and skip the annual fee: at 4% take-out, food delivery, and dining — and with no foreign transaction fees — this card would be my pick for restaurants in a no-fee wallet.

Travel and Gas: Wells Fargo Propel

Card Name w Details & Review (no offer)
FM Mini Review: Combine points with the Wells Fargo Visa Signature to get 1.5 cents per point in value towards travel (or 1.75 cents per point if you spend $50K per year on the Visa Signature and combine your points).

No Annual Fee
Earning rate: 3X flights, hotels, homestays, car rentals, dining, gas, rideshares, transit, and streaming services
Base: 1X (1.5%)
Travel: 3X (4.5%)
Dine: 3X (4.5%)
Gas: 3X (4.5%)
Other: 3X (4.5%)
Card Info: Amex Credit Card issued by Wells. This card has no foreign currency conversion fees.

The Wells Fargo Propel card flies under the radar in this hobby, but it shouldn’t fly under yours if your goal is to reduce annual fees while earning excellent rewards: in addition to 3x on gas (an effective 3% when redeemed for cash back), this card offers that same 3x / 3% back on a wide range of travel. The bullet points highlight flights, hotels, homestays, and car rentals, but the fine print includes 3x on passenger railways, cruises, timeshares, travel agencies, campgrounds, taxis, limousines, ferries, toll bridges and highways, parking lots, and more — basically every category I need for travel. It also includes cell phone insurance, though you’d give up an increased category bonus on wireless services if you paid your bill with this card.

The key drawback on this card is that the Propel is an American Express. That means that even though the card carries no foreign transaction fees, you may need to carry a backup card when you go overseas (since Amex is less likely to be accepted). A second consideration is that, while this card offers 3% back on car rentals, it only offers secondary collision damage waiver (which means that it will pay out only after any personal auto insurance you carry).

Grocery: Chase Freedom or Freedom Unlimited

Card Name w Details & Review (no offer)
FM Mini Review: Great for 5X categories. Good companion card to Sapphire Reserve, Sapphire Preferred, or Ink Business Preferred.

No Annual Fee
Earning rate: 5X Lyft through March 2025; 5X in rotating categories on up to $1,500 spend per quarter (Q4 2023: PayPal, wholesale clubs, and select charities).
Base: 1X (1.5%)
Shop: 5X (7.5%)
Other: 5X (7.5%)
Card Info: Visa Signature or Platinum issued by Chase. This card imposes foreign transaction fees.
Noteworthy perks: Free DashPass for up to 3 months upon activation ✦ $10 quarterly Instacart credit ✦ 3 months free Instacart+
Card Name w Details & Review (no offer)
FM Mini Review: Great for 3x categories and 1.5X everywhere else. Excellent companion card to Sapphire Reserve, Sapphire Preferred, or Ink Business Preferred. Click here for our complete card review

No Annual Fee
Earning rate: 5x travel booked through Chase Travel℠ ✦ 5X Lyft through March 2025 ✦ 3x dining ✦ 3x drugstores ✦ 1.5X everywhere else
Base: 1.5X (2.25%)
Dine: 3X (4.5%)
Other: 5X (7.5%)
Card Info: Visa Signature or Platinum issued by Chase. This card imposes foreign transaction fees.
Noteworthy perks: Free DashPass for up to 3 months upon activation ✦ $10 quarterly Instacart credit ✦ 3 months free Instacart+

This is the only slot in the wallet where I included a limited-time bonus category, but with 5% back on up to $12K in grocery store purchases in the first year at the moment (excluding Walmart and Target) on top of the regular welcome bonus, either of these annual-fee-free cards would make for an easy keeper in the wallet for at least the next 12 months (and most people find a use for either card long-term in a more realistic wallet that includes a premium card or two).

Given that the Freedom card ordinarily bonuses grocery stores at least one quarter per year, it’ll be interesting to see what happens when grocery stores are a 5% category. When the new welcome bonuses launched, I wondered aloud whether you can earn 9% back this quarter at Whole Foods on the Freedom card (1% base + 4% for the rotating category bonus + 4% for the welcome bonus grocery bonus). I haven’t yet had a chance to test it, but I will this weekend. If the Whole Foods double dip works, it should mean at least one more opportunity to double dip at a grocery store within the next year as I expect we’ll see grocery stores repeat as a bonus category at some point in 2021.

For those over 5/24, the options for uncapped, non-rotating-category grocery store bonus earn are bleaker than I’d have imagined. The best card for those who can stay under a quarterly cap is likely the Huntington Voice card (at 3% back on up to $2K per quarter in your choice of categories, which could be grocery stores) unless you can qualify for Bank of America Preferred Rewards Platinum Honors, in which case the Cash Rewards card (and MLB variants) offer 3.5% back on up to $2500 per quarter — though note that on a Cash Rewards card, you’re sharing the $2500 quarterly cap with the 3% category of your choice (which becomes a 5.25% category with Platinum Honors).

Amazon.com: Affinity Cash Rewards Visa Signature

Card Name w Details & Review (no offer)
FM Mini Review: The Affinity Cash Rewards Visa Signature card could be really interesting for its rotating categories since the fine print indicates that it stacks on top of ordinary earnings.

No Annual Fee
Earning rate: 5% back at all bookstores, including Amazon (note: this is capped at $1000 in purchases per month) ✦ 2% back at restaurants, gas stations, supermarkets, Netflix, Spotify, Uber and Lyft.
Base: 1%
Dine: 2%
Gas: 2%
Grocery: 2%
Other: 5%
Card Info: Visa Signature issued by AFCU. This card has no foreign currency conversion fees.
Noteworthy perks: No foreign transaction fees; cell phone protection

I’ve mentioned this card several times over the past year or so. To me, this seems like the most intriguing card that I’ll likely never get. I probably won’t get it because I can already get 5x at Amazon by purchasing gift cards at an office supply store with no annual fee with an Ink Cash card, but I definitely find it interesting that this card offers 5% back at bookstores including Amazon — though reports indicate that the 5% back at Amazon is capped at $3500 in purchases per month (not a problem for most of us).

More interestingly, it offers quarterly bonus categories that add 5% on top of normal rewards. This quarter, the bonus is on clothing and home furnishings. But next quarter, it will be Amazon and other popular retailers — which means that I believe it’ll offer 10% back at Amazon in Q4 (again, likely subject to a cap of $3500 per month). Earlier this year, dining and grocery have been rotating categories. Since the card ordinarily offers 2% back on dining and grocery and the 5% category stacked, it offered 7% back on those categories. Between 5% back at Amazon and what could be really intriguing stacking bonus categories like that, this card would be interesting in my dream-team no-fee wallet.

Other regular needs: US Bank Cash+

Card Name w Details & Review (no offer)
FM Mini Review: Useful for its 5% categories, but you can do better for all other spend.

No Annual Fee
Earning rate: Each quarter, choose two 5% cash back categories (capped at $2K spend per quarter combined) and one 2% category (uncapped). 1% cash back everywhere else. 5% Categories: Home Utilities ✦ Ground Transportation ✦ Select Clothing Stores ✦ Cell Phone Providers ✦ Electronic Stores ✦ TV, Internet & Streaming Services ✦ Gyms/Fitness Centers ✦ Fast Food ✦ Sporting Goods Stores ✦ Department Stores ✦ Furniture Stores ✦ Movie Theaters. 2% Categories: Gas Stations ✦ Restaurants ✦ Grocery Stores
Base: 1%
Travel: 5%
Dine: 2%
Gas: 2%
Grocery: 2%
Shop: 5%
Phone: 5%
Other: 5%
Card Info: Visa Signature issued by USB. This card imposes foreign transaction fees.

Talk about a card I’ve totally ignored! The Cash+ would is a card that wouldn’t have been anywhere near the top of my mind if I hadn’t gone looking to assemble this fictional wallet, but it would definitely earn a slot. Being able to choose two categories for 5% back each quarter (on up to $2K in combined purchases per quarter) means that you could design this to be a catch-all for stuff not bonused by other cards in your wallet.

The list of potential 5% categories (see the full list in the blurb above) is pretty broad. With options like home utilities, electronics stores, department stores, clothing stores, and cell phone providers (among others), it should be easy for most households to determine which two options have quarterly expenses closest to $2K combined (and remember that you can change them each quarter, perhaps choosing electronics and department stores during a time of year when you know you’ll be shopping more at those places and other categories at other times). This card makes the list over other rotating-category cards specifically because you set your own 5% bonus categories, enabling you to plan ahead and make sure this is useful.

Office Supply Stores: Chase Ink Business Cash

Card Name w Details & Review (no offer)
FM Mini Review: This one should be in everyone's wallet. Incredible welcome bonus for a no-annual-fee card. Great card for 5X categories. Excellent companion card to Sapphire Reserve, Sapphire Preferred, or Ink Business Preferred. Click here for our complete card review

No Annual Fee
Earning rate: 5X office supplies and cellular/landline/cable (on up to $25,000 in total purchases in 5x categories annually) ✦ 2X on the first $25K in combined purchases at gas stations and restaurants each cardmember year ✦ 5X Lyft through March 2025
Base: 1X (1.5%)
Dine: 2X (3%)
Gas: 2X (3%)
Phone: 5X (7.5%)
Office: 5X (7.5%)
Other: 5X (7.5%)
Card Info: Visa Signature Business issued by Chase. This card imposes foreign transaction fees.

Office supplies aren’t a huge spending category for me, but if I were able to sneak a business card into my no-fee wallet, the Ink Business Cash would be it. Five percent back at office supply stores like Staples and Office Max/Depot would mean the ability to pick up gift cards for a wide range of other retailers and expand my 5% back on other types of purchases. I’ll be the first to admit that this strategy sounds better than it works in practice for me: I hate juggling multiple retailer gift cards and I have a Tupperware container full of them that makes its way in and out of the car every so often with a bunch of unused or semi-used gift cards. Still, if I had to go all-no-fee, I’d force myself to be more organized with this in order to get 5% back on a wider range of expenses.

Bonus: A transferable currency card (Blue Business Plus)

Card Name w Details & Review (no offer)
FM Mini Review: 2X rewards for all spend (up to $50K per year) with no annual fee makes this card a winner. Click here for our complete card review

No Annual Fee
Earning rate: 2X Membership Rewards points on all purchases, up to $50K spend per calendar year (then 1X thereafter). Terms apply. (Rates & Fees)
Base: 2X (3.1%)
Card Info: Amex Credit Card issued by Amex. This card imposes foreign transaction fees.

As PeterSFO points out in the comments, those who want to maintain access to a transferable currency with no annual fee would likely want to add the Blue Business Plus to this wallet. Truthfully, this card didn’t even come to mind when I wrote this post. I think that was likely because I wasn’t thinking of amassing a pile of points within a specific program. If the goal is to eliminate annual fees, you will be unlikely to earn a truly useful quantity of points absent significant unbonused spend.

On the other hand, if the purpose of assembling your no-annual-fee wallet is in order to earn great rewards on most stuff so that you can focus unbonused spend on a card with a welcome bonus (that is to say that you use the no-fee cards for most purchases and then additionally open a card now and then that may have an annual fee but that you have picked up exclusively for a welcome bonus), this card would suddenly make a ton of sense to me. First, there are many cards that earn Membership Rewards, which means you could stay busy opening those cards one by one for welcome bonuses and keep this card long-term to keep the points alive and use when you are in between new card bonuses. Second, if you are accumulating a meaningful stash of Membership Rewards points, you may well value 2x Membership Rewards points that you can earn everywhere on the Blue Business Plus (on up to $50K in purchases per year, then 1x) more highly than some of the 3% cash back bonus categories above. Indeed, it isn’t hard to get better than 1.5c per point in value out of Membership Rewards points, particularly if you have enough points to consider international premium cabin flights.

In my case, this card would absolutely be worth adding to my no-fee wallet. The Blue Business Plus could easily replace a Freedom card in this wallet if there were no 5x grocery bonus for the first year on the Freedom given that the Freedom card’s rotating categories can probably be covered with the other cards in the wallet (and the long-term return is clearly better than the Freedom Unlimited). On the other hand, as Peter points out, it could alternatively replace the Propel card as long as you value 2x Membership Rewards points more than 3% cash back. Any way you slice it, this is an excellent card to consider if you’re willing to add a business credit card.

Applying for Business Credit Cards

Yes, you have a business: In order to sign up for a business credit card, you must have a business. That said, it's common for people to have businesses without realizing it. If you sell items at a yard sale, or on eBay, for example, then you have a business. Similar examples include: consulting, writing (e.g. blog authorship, planning your first novel, etc.), handyman services, owning rental property, renting on airbnb, driving for Uber or Lyft, etc. In any of these cases, your business is considered a Sole Proprietorship unless you form a corporation of some sort.

When you apply for a business credit card as a sole proprietor, you can use your own name as your business name, use your own address and phone as the business' address and phone, and your social security number as the business' Tax ID / EIN. Alternatively, you can get a proper Tax ID / EIN from the IRS for free, in about a minute, through this website.

Is it OK to use business cards for personal expenses? Anecdotally, almost everyone I know uses business cards for personal expenses. That said, the terms in most business card applications state that you should use the card only for business use. Also, some consumer credit card protections do not apply to business cards. My advice: don't use the card for personal expenses if you're not comfortable doing so.

Bottom line

I’ve never really thought about assembling a wallet full of credit cards with no annual fee, but if I were to do so with the goal of earning maximum rewards on my most frequent spending categories, the above fictional wallet would offer me very decent rewards on a wide range of purchase categories. With Bank of America Preferred Rewards with Platinum Honors, things would get even more interesting given that I could easily earn 5.25% back on travel, gas and dining (subject to quarterly caps and one bonus category per card, but it would be pretty easy to have a card for each of those categories that would mostly meet my needs within the quarterly caps). One thing missing from this wallet is an “everywhere else” card. That was somewhat intentional: first, I could likely use one of the options in the list to buy gift cards to pay most of my other expenses with good net rewards; second, if I were to follow the strategy in this post, it would ideally be so that I can earn excellent rewards on the categories in which I spend most and then constantly focus any “everywhere else” spend on a welcome bonus for greater rewards than I’d get with a traditional “everywhere else” credit card.

I have to admit that I was pretty surprised at the earning power of this no-fee wallet — and at the fact that US Bank found its way into more than one slot. Perhaps more surprising to me was how easy it is to earn 3% back or better with no annual fee — and that’s a good reminder that miles and points aren’t free. Don’t forget to consider the opportunity cost of earning points when calculating which cards belong in your wallet — the earning rates above are in those cases the cost you’re paying to earn something “better”.

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The Target RedCard is free, and its 5% Target discount extends to store-specific gift cards — Southwest, Airbnb, Hotels.com, restaurant cards, Disney, etc. If you’re willing to put up with the hassle, you can extend that 5% discount to a good portion of your spend. (Though you can do the same with your Amazon card by buying gift cards at Amazon.com.)


Yes that’s how I get 5 percent off at safeway, my closest grocery store. Just buy their gift cards for 5pc off on amazon.

Mary Jane's

Hi Nick, once again, an insightful article. I have a freedom card and I notice you put down 5x for groceries for a year. Is that just for new card holders or does it apply for existing freedom card holders?


A couple of other options:
If you have $100k to invest with ML to get BofA plat preferred honors, then Cash Rewards or Travel Rewards cards are a decent option, and come with SUBs.
Also, no love for Citi? Citi Double Cash and a Rewards+ would be a nice TYP earning no AF combo.


Ah I see, I didn’t catch that in the summary. Usually I skip the summary because new information generally isn’t expected to be presented there.

From a standpoint of no AF and never will pay for an AF, then yeah, TYP/MR cards lose their luster. However, some people will occasionally sign up for an AF card in order to use the points they have accumulated with no-AF cards.


I think that citi pairing would really only make sense for someone interested in jet blue, and even then, it’s probably a niche use case at best. That being said, it would result in a roughly 2.3% return at a 1.3cpm valuation.

Otherwise, I think transferring DC cashback to ty points just to get that extra 0.22% back through mortgage checks is way too annoying for most people.

Eric V

At least your graphics value Chase points at a 50% premium, but of course you cannot get that premium without holding a card with a steep annual fee.

Of course, you can bank them and then cash them out every few years without paying the fee every year by applying and dropping the card.


Nick, just FYI, I received an offer yesterday from my Chase Amazon Rewards Visa for 4 percent rewards on ALL spend until Feb. 11, 2021. I never use this card for anything but buying on Amazon (which is 5 percent rewards back if you are a Prime member). You can use the rewards on Amazon or get cash back. If readers have this card and get the offer, it’s hard to beat 4 percent back on all spend for basically six months.


Best feature of the Propel is that it’s an Amex imo. +$50 on a free card via shop small this year. Is there a list of 3rd party Amex cards anywhere? Was bummed when Penfed Pathfinder switched to Visa.


I’d drop the Go and add the Wells Fargo Visa Signature. Now your Propel is 4.5% on travel, gas, and dining when redeemed for airfare.


I’ve often wondered why the US Bank Cash+ doesn’t get more press. 5% on home utilities? That’s great for me as my one utility bill has charges for: gas, electric, water, sewer, fire protection, mosquito control.

I was able to get 5% back on a new set of skis by selecting sporting goods one quarter.

I initially got the card years ago because they offered charities as one of their categories and I was really disappointed when that category was removed.

Brad C

US Bank Cash+ has a long history of nerfing this card anytime there is a useful category that is easy for people to max out.

Joao silva

Can’t tell who is paying you more, crappy us bank or someone else. Ok advice considering two of those cards recently became good, you excludied the majority of us who has these cards and most people won’t have a EIN and this environment selling on eBay won’t cut it as a business but people may be mislead into thinking that.


That seems to be what the data points at Reddit suggest too. Amex small business cards are not impossible to get (although personally I think none of the fee cards are potential keepers for most, unless you will definitely Pay with Points a lot on the Business Platinum).

Others like Bank of America or Citi/Barclays AA cards are hit-or-miss, but if you get declined, you might not be able to have it reconsidered like you would with personal cards.

U.S. Bank is okay for non-churners (they won’t usually approve anyone that opens multiple cards in a year) and non-MS (they apparently will shut people down pretty fast, as you’ve previously noted).


Which card would you use for Amazon when you buy over 6k a month? Currently we buy gift cards with Ink cash but Office Depot is out of the $500 (or all but $50) cards quite often.


Amazon Prime Visa if you have Prime. 5 percent off at amazon and Whole Foods.
no limit as far as I can tell. Just enter as your pro at payment method and youre done

Stephen Pepper

Ink Cash to buy ‘Amazon Business’ gift cards using Fluz. That now codes as 5x but they’re regular Amazon gift cards.


It’s single purpose, but there is a store card giving you 5% at Amazon no limit.
The Chase card already mentioned has occasional outside spending offers as well.


Costco Visa. If you buy things that need warranties and can get them for the right price at Costco, that is the way to go. Much more valuable than a possible bit more in rewards with another card.

Perhaps not a strictly free card as you need a Costco membership, but I could not imagine not shopping there. My brother has been a member for years for the car rental benefits, and he has never set foot in a Costco.

Also a 2/3/4% card in various categories. 4% back on most gas (e.g. not at Sam’s Club), and the extra bit with a different card is not worth the effort for $1 a month.


Very often Costco has about the best price anywhere on certain Apple Macs, for example. No reason you cannot buy online.

Costco car rentals can be good if you do not have status with National, Avis, etc. Second free driver always, 10% minimum off, and a guaranteed class upgrade. I don’t follow Autoslash enough to know whether that gets matched.


The downside to Costco Visa is that you do have to go in-store once per year for your rewards certificate and redeem it there (cash or applied to future purchases). Most other cards give you your cash back / miles when the statement closes or when you submit payment.


I buy my Gas there,2 computers ,2 TV’s and ur not buying junk . Self check out and early hours for seniors too .The frozen shrimp 2lbs for $15 and the quick Food court too.I can get it all delivered for a tip.


Interesting article as always Nick.

But I’m surprised the BBP didn’t make the list, is it because you factor in SUBs in your picks? I thinks that’s the only card that’ll get you a transferrable currency without being paired with a premium card. If we value MR at at least 1.5, it should easily take the place of the Propel card.

The Freedom Unlimited is just a 1.5 cent cash back card without a means to transfer to UR. I think you would be replacing it after the first year with a 2% card. So SUB aside, I question whether you would have it in this wallet long-term.


Me Too. Regroup keep the points u think will be good in 2 years . I think Singapore points are only good for 3 years which I hope not (150k) .
#stayincave..BLM and Be Careful the end isn’t near..