No-insulation (NI) high-temperature superconductor (HTS) coils show a great advantage on enhanced thermal stability during quenches. It is inevitably exposed to ripple AC magnetic fields in some applications, such as synchronous machines, tokamak magnets and maglev trains. The AC applied fields can induce an eddy current in NI coils due to the absence of turn-to-turn insulation. This eddy current may cause considerable maximum DC operating current degradation and additional magnetization loss in NI coils, which are still unclear. In this paper we study this issue using both experiments and simulations. An experimental platform is built to measure the maximum operating current of HTS coils exposed to AC axial applied fields, and the results show that the axial AC applied fields can lead to a significant maximum operating current degradation (22.9% in this study) on the NI HTS coil due to the eddy current induced even though the field is parallel to tape’s ab-plane and has a very low amplitude and frequency (26.88 mT/50 Hz). Meanwhile, this low applied field has little effect on the critical current of insulated HTS coils. A numerical model is applied to elucidate the underlying physical mechanism of this phenomenon, and the magnetization loss induced by an additional transport current is analyzed using this model. The influence of graded turn-to-turn resistivity technique is also investigated, and the results show that this technique can effectively prevent the maximum operating current degradation and reduce the magnetization loss of NI HTS coils exposed to AC axial applied fields.