Magic without limitations or a cost I think is really bad, because its harder for the reader to understand. If you could summon an immortal dragon every time you got in trouble then the story wouldn't be interesting, there would be no conflict. If you were haveing say a deity of a super magic awesome person that can do anything and you want them to have no limitations, a good way to keep the conflict is to give them self-limitations. Not limitations that are permanent but one that they have given themselves, like they won't use any magic that kills or hurts people, something like that. Another way is limiting it through imagination, like the green lantern. Make the magic so that it is potentially unlimited and all powerful. The one Val mentioned with the Inheritance cycle is also a good idea because the magic is limited through energy. You could potentially use huge amounts of energy to do something massive but it would require you to draw the energy out of all the life around you causeing many creatures and plants to die. Sacrifices are also a good way to make the magic limited but without limiting it. You could just have it require a huge amount of people to be killed in order for you to do something big. Using tools is another way to limit unlimited magic, you could have the magic channeled though a staff or wand. Another thing is danger as mentioned by Fredrik, you could have the magic be chaotic and unpredictable, or you could use a magic language like the Inheritance cycle where pronounciation is vital and if you pronounce something wrong the desired outcome is drastically changed. You could end up accidentally teleporting yourself into a volcano instead of lightly toasting your bread. You don't want to have magic where the reader just thinks, why didn't he just make the dragon evaporate? Give the magic consequences. Even if the hero does make it evaporate, where does it evaporate to? does it disperse though the air? if so what effect would it have on the environment? would it make it harder to breathe because there are little dragon particles floating around? would it make it harder to see? maybe it would be poisonous to breathe in dragon? you might choke on the air because it is thicker. Try to keep the magic interesting, and that will keep the reader hooked. Give your magic the potential to be unlimited, but make it really hard or have horrible consequences to be able to use the magic to its full, unlimited effect.
One of the great rules of creating a magic system is ask why to everything. Literally everything.
