How many people truly understand their credit cards? Many of these products are offered with a complex array of features and benefits, not to mention pages of fine print that make up their terms and conditions.
This month, we’re featuring the best credit cards that offer simple terms with the fewest fees and penalties possible, and are the easiest for the average cardholder to understand.
Choosing a Simple Credit Card
All credit cards applicants should consider a card’s terms and conditions before applying. Thankfully, credit card users can easily find the most important rates and fees by looking at the card’s Schumer Box. There, all the key terms will be spelled out in a table, and applicants can compare multiple products side-by-side with everything presented in the exact same format.
Applicants looking for the simplest relationship with their card issuer may also want to consider cards offered by the same institution where they hold their checking or savings account. This way, they can view all of their account information in a single place, and payments can be made simply by transferring money between accounts, not from one institution to another. Credit card users looking for the simplest credit card would be wise to consider not just banks, but credit unions as well, which can offer simple terms at the request of their members.
Before you apply for any credit card, it can be helpful to check your credit score to see where you stand, and to focus your search on credit cards that are geared toward your credit range so that you apply for cards your more likely to be approved for. You can see two of your credit scores for free on Credit.com, updated every month.
The Winner: PenFed Promise
Why it won: This credit card is about as simple as you can get. For example, under fees in its Schumer Box, all you will see is the word “None” repeated seven times. This means that it has no annual fee, no foreign transaction fee, no balance transfer fee, no cash advance fee, no late fee, no over credit limit fee, and even no returned payment fee. There is also no penalty APR or minimum interest charges.
Rates: Cardholders receive a standard interest rate of 7.99% to 16.99% when they open their account, based on their credit-worthiness when they applied.
When you apply: An applicant must be a member of the Pentagon Federal Credit Union, which is open to members of many different government, military and defense organizations. Those who aren’t affiliated with the aforementioned groups can join one of the military support organizations listed on the Pentagon Federal Credit Union website for a small one-time donation.
1st Runner-Up: Barclaycard Ring
Features: Like the Barclaycard Promise, the Barclaycard Ring has some unique features. This card actually uses social media to enable customers to have a role in shaping its terms, conditions and rewards. Cardmembers vote on whether to change terms and fees, and Barclaycard opens the books to show cardholders where all the money goes.
Costs: Cash advances have a $1 fee for each transaction, and the foreign transaction fee is 1%, but cardholders recently chose to make the foreign transaction fee 0% by raising the cash advance fee to $3. In addition, cardholders interact with Barclaycard product managers online, who are not faceless representatives on the other side of the world, but two actual people named Jared and Jen. Other simple features of this card include a single APR of 8% for all customers for purchases, balance transfers and cash advances. And of course, there is no annual fee for this card.
2nd Runner-Up: Discover it Chrome
Features: The standard Discover it card was already a fairly simple card, but it did feature a rewards program that featured rotating bonus categories of purchases that cardholders had to register for and keep track of. Discover seemed to have received the message that some customers prefer simpler rewards, and added the Discover it Chrome card to the lineup.
This card offers 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and 1% cash back on all other purchases with no restrictions. Cardholders can redeem their cash back rewards in any amount, at any time as a statement credit, a deposit to their bank account, or for a purchase at Amazon.com. In fact, Discover will even let cardholders retain their rewards if their account is closed for any reason, which is an uncommon feature.
Costs: As with the standard Discover it, there is no annual fee, no foreign transaction fees, and Discover will automatically waive the cardholder’s first late payment fee.
At publishing time, the Barclaycard Ring is offered through Credit.com product pages, and Credit.com may be compensated if our users apply for and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.