Credit Cards

A Credit Card With No Late Fees?

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Last updated on July 25, 2019 Comments: 4

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Over the last year or two, credit card companies in general have been ratcheting up fees, perhaps to make up for more and more people who are learning to avoid them and to pay for the generous rewards they have been offering until recently. For example, it’s difficult to find full 0% balance transfer offers. These days, many cards are charging a fee as much as 3% of the transferred balance, and in some cases, the APR for transferred balances is above 0%.

Now, cards that don’t charge some of the more basic fees will get attention. Of course, you can be sure the credit card companies aren’t losing money. The interchange fee — what the merchant is being charged every time someone uses one of these cards — is likely higher. It doesn’t end there. As a consumer, you’re not immune. Merchants simply transfer higher credit card processing costs onto the consumer in the form of higher prices.

One glaring example recently is my (formerly) local gas station, which recently began charging a higher price for credit card users.

A new card that’s getting some attention due to having “no fees” is American Express Clear. They advertise having “no fees of any kind.” In fact, there is some truth to this.

The credit card doesn’t have an annual fee. (There is usually no reason for anyone to hold onto a card that has an annual fee. Some people who regularly use concierge services offered by cards may be able to justify the fee, but rarely can anyone else.)

There are no late fees. That doesn’t mean you won’t be charged interest if you don’t pay your balance off each month. When you don’t pay your bill on time, more interest accrues on the higher balance.

The card doesn’t have over-limit fees, balance transfer fees, or cash advance fees. The current promotion offers a 0% APR for “up to” 12 months and a 4.99% APR on balance transfers. This makes this card not ideal for arbitrage as the APR is close to the best APY you can receive on savings accounts. The cash advance APR is a very high 23.24%, so what you’re not paying in the fee is redirected elsewhere in an obvious manner.

The cash back rewards are not the best, either, with only a $25 gift card offered for each $2,500 spent. The standard APR on purchases (after the promotional period) is also not competitive at 14.24%, 16.24% or 18.24%, depending on your credit.

So there’s a lot of hype about the Clear from American Express, but it doesn’t sound all that great to me. Still, if you want to give it a try, apply or read more information.

Article comments

Anonymous says:

I recently applied for American Express Clear card due to the no fees and $25 for $2,500 worth of spending (1% ‘cash back’). I looked into the Blue Cash card but I’m not a big spender so it would of been a little more or less than 1%. I didnt want to optimize my spending so I could earn money I was already spending. Clear sends you the $25 gift card every time you reach $2,500 in spending. So you do not have to wait a year to get the precious 1% ‘cash back’. I rather take the $25 gift card to purchase something when I have the funds available and placing those available funds into a 5% APY interest savings account to earn interest immediatley than to wait a year to do all of that.

Anonymous says:

In other words, Blue Cash could average less than 1% for some people.

Anonymous says:

Hello. The AMEX Blue Cash page states that you earn 0.5%-1% on your first $6.5k of spending and, after that, 5% on 3 types of everyday purchases (not TVs or furniture).

Anonymous says:

$25 for 2,500 worth of purchases is a low 1% return on your purchases. I love my AMEX Blue Cash (5%/1.5% depending on your tier).