October 12, 2025 · 9 mins read
Santosh Kumar
A credit card is a tool that can be used by a person to borrow money from a bank or financial institution till the credit limit (borrowing limit) is reached in each billing cycle. A credit card allows you to buy goods and services online and offline. It also allows you to withdraw cash in an emergency.
A credit card allows a person to borrow some money for the time being and can be repaid to the bank or financial institutions after the end of each billing cycle. At the end of each billing cycle, the consumer receives a billing statement for the credit card with the total and minimum amount due and the due date. If the entire due amount is paid at the end of each billing cycle, there is no interest charged. But if only the minimum amount is paid, the consumer pays high interest rates for the remaining amount.
Credit cards also offer many advantages. For example, all credit cards offer cashback, discounts, special offers for travel tickets, restaurants, and dining options, even for buying fuel. Although these perks can vary by the brand of the credit card. Credit cards can also act as an emergency source of funds if there is any immediate need.
Credit cards also help a person develop a credit history. Credit history gives an overall score based on how a person has managed money. This includes loans, repayment patterns, history of loan defaults, and unpaid debts. In India, the credit score is 300 to 900. A credit history might be required for loans and mortgages in the future. But the credit score can get damaged by debts and overspending.
While a credit card has an APR (annual percentage rate) that applies to the unpaid balance, it also has an annual fee. The yearly fee of a credit card is a fixed annual charge. The annual fee is charged for all the perks (such as travel rewards, food places and delivery points, cashbacks, lounge access, and more) that are generally offered with a credit card. While some credit cards are always free with no annual charge (such as student cards), premium cards charge a high annual fee. Hence, understanding the annual fee is very important, which will be discussed in this article.
A credit card without an annual fee comes with a lot of advantages. This can be particularly beneficial for students or first-time users.
1: If the annual fee is null, the cost of ownership is zero. Hence, nothing to worry about as long as the regular billing cycle payments are done.
2: Since there is no cost of ownership or annual fee, this type of card is ideal if the spending is intermittent or only for a limited purpose.
3: A credit card without a fee could come with limited usage, but it can still help a person build up a credit history (if monthly payments are on time and in full) without any unnecessary fees.
4: If a person is still trying to develop a spending pattern or discipline, these no-annual-fee cards can help to do that without any risk or extra cost.
Also Read: Low Interest Credit Cards in India: Best Options
1: Cashback or rewards: Spending with a credit card gives some rewards and cashback. Even if the spending is small, such as everyday groceries, books, food, dining, and subscriptions. If a person is opting for a credit card without an annual fee, this is a key feature they should look for.
2: Introductory offers: Some cards offer a certain amount of money or points as an introductory offer. This could also be a key feature to look for.
3: The APR (annual percentage rate): Even if a credit card does not have an annual fee, it still will certainly have an APR or annual percentage rate that will be charged as interest on the amount spent in each billing cycle. If the person is just getting started with a credit card or a student loan, it is critically important to check this APR rate to avoid paying a high interest rate.
4: The easiest way to avoid APR is to pay the amount spent in full for each billing cycle. Although sometimes grace periods are offered on some credit cards, if payment is delayed. The consumer should check that too.
5: 4. Credit building: Credit score building is one of the main goals of having a credit card. Hence, check that the no-annual-fee credit card has the feature that automatically does credit reporting to the concerned authorities so that the credit history can be built with the credit score over time.
6: 5. No or low foreign fees: It’s also important to check that the no-annual-fee credit card has no or very low fees for foreign transactions, if applicable.
1: Even if there is no annual fee, the credit card might still have other fees (such as APR, late payment fees, and more). Read the full disclosure.
2: Check if the no-annual-fee credit card needs any fixed deposit as collateral.
3: Check carefully how much the credit limit is for each billing cycle.
Also Read: Which Credit Card Offers Fuel Cashback in India?
1: Without the annual fee, the credit card can be almost free if the monthly payments are made on time
2: A no-annual-fee credit card does not require any previous credit history
3: A no-annual-fee credit card can work with a low or modest income
4: This will work perfectly if the spending is less or irregular, for example, with students
There are several credit cards in India that have no annual fee. Below are some of the examples that could be suitable for students.
Also Read: Top Credit Cards for International Travel in 2025
This is one of the most popular and suitable ones for students because of the following features:
1: No joining or annual fee
2: There are 4 reward points for every 100 rupees spent (for online spending) and 1 reward point for every 100 rupees spent (for other spending)
3: UPI enabled
4: A ton of welcoming benefits and rewards
5: Cash withdrawal up to 90% of the credit limit, and no interest is charged for the first 48 days for this cash advance.
6: Some interest-free purchase for retail shopping
7: This can also be used as an add-on card to a primary Kotak 811# Dream Different Credit Card with all benefits.
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The ICICI student credit card is designed to meet the needs of the student. There are two ways these cards can be obtained by a student: firstly, as an add-on or supplementary card, and secondly, by having a fixed deposit (FD) of a minimum of about 50,000 in the bank. The credit limit is typically 90% of the FD amount. These credit cards of ICICI typically come with a zero annual fee or no additional fee to the primary cardholder.
The eligibility criteria to get this card are that the student should be about 18 years old and an Indian citizen. Application for this card can be done online with standard documentation like an Aadhar card, PAN card, Voter ID, or passport.
This could also be a very good option to obtain a zero annual or joining fee credit card for a student. IDFC also does not charge zero interest for ATM cash withdrawals up to 45 days, and charges no forex fees.
These cards could be particularly good for a young student they are looking for a zero annual fee credit card.
Axis Bank also offers similar credit cards. But typically, the credit limit is about 15000, valid for 5 years. But if the credit card is an add-on card, then it is issued against a fixed deposit, and the credit limit changes accordingly.
Also Read: Virtual RuPay Cards: Using UPI without Bank Account
Yes. Many banks like Kotak 811 and IDFC offer these cards without any annual fee.
No. But a fixed deposit might be needed.
Yes, as the credit scores are reported to the credit bureau.
APR, late fees, and cash withdrawal charges may apply
A student status, 18 years old, an Indian citizen, and an FD
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