Clear credit cards, sometimes called standard credit cards, are credit cards that are designed to have a very simple charging structure so that a user can understand exactly what is being charged when they are using the card.
One of the issues that a lot of consumers have with credit cards is that they are very complex. While this means that it is possible to take advantage of the complexities if a credit card user is prepared to spend a lot of time studying the ins and outs of credit card offerings, for some people it can be quite hard to understand exactly where they are, and many people would rather spend their time doing something else.
There is a difference with no frills cards, which are often sold to the same market. No frills cards are different in that although they are designed to be cheap cards by getting rid of a lot of the features that normal credit cards can have – such as travel insurance and purchase insurance on items that are purchased with the card – they still use some of the differential interest rates and penalties that can make a credit card quite complex.
One thing that a clear card will tend to do is to have the same interest rate for purchases and balance transfers. This can make a big difference to a credit card user as they can often find that an advertised low interest rate is not nearly as low as people thought it would be because of differential interest rates and what are known as payment hierarchies.
Differential interest rates are when a card is offered with a very low interest rate, but this rate only applies to one type of balance, such as that for spending. Other balances, such as ones that come through balance transfers are charged at a higher rate of interest. The payment hierarchy adds to this by setting off the repayments first against the lower interest rates, which means that the balances with a higher interest rate will be charged for a longer time.
Many, although not all, credit cards that are marketed as clear credit cards are ones that charge no annual fees. Annual fees in themselves are a complication on a credit card structure. These credit cards that charge no annual fees are cards and that also charge a single interest rate can be very easy to understand and can be suitable for a person that does not want to have to think too much about how their credit card use will affect their finances.
