Is it Time for a Simpler Credit Card?

Everyone loves a great rewards or cash back program and credit card issuers have consistently attempted to outdo each other in recent years in their efforts of drawing in new customers. This has led to an over-saturation of these types of programs.

The over-saturation has resulted in a few confusing and frankly, overwhelming efforts from the banks and credit card companies. Consumers have been frustrated as a result and many have said, “Enough already!” Luckily, the credit card networks are listening and are bringing forth new credit card structures. Is it truly a simpler, no frills credit card consumers want, though?

These days, you can find a straightforward, “no bling” credit card that delivers low APR, the absence of too many fees and a return to the simpler days when a credit card was, well, a credit card and not so much as an accessory. Keep in mind, too, consumers are reclaiming their power; they’re paying debt off, they’re focusing on saving more and spending less and those who are carrying a balance are paying far more than just the minimum due each month. Chalk it up to lessons learned courtesy of a tough recession. While there’s a definitive place for rewards-heavy cards, the new niche is simplistic, easy to understand and worth consideration.

Several banks and card networks are now offering what’s referred to as a “no frills” card. The interest rates are comparable to the national average (in many cases, they’re impressively lower) and your spending earns you nothing but the purchase you just made. That said, you might not have the bells and whistles of a rewards or cash back card, but you do have an impressive APR and more times than not, there are no annual fees.

Why Now?

Simply stated, folks are losing trust and feel as though they’re on a wild ride with financial institutions. They don’t want to equate managing their credit cards and other financial obligations as though they were on a boat in stormy weather with no idea of what to do. We all appreciate a bit of smooth sailing. But these credit cards offer more than that.

Late With No Penalty

Many, including Barclays PLC credit card, is offering no late fees for its consumers who go for the “vanilla” credit card offers. What card members are offered is a share in profits as well as a role in future decisions associated with the company’s credit card division. You won’t be sitting in the boardroom next month, but it does put a bit of power back in the consumer’s hands – and that’s quite impressive. The MasterCard that displays the Barclaycard Ring has an 8% interest rate, but what it doesn’t have are balance transfer options, annual fees and, of course, no late penalties.

This and others like it are proving to be quite popular. Turns out, many folks don’t mind the lack of the rewards – providing there’s also a lack of fees and high interest rates. Keep in mind, too, as of this publication, the national average for credit cards hovers around 14.85%, though for those with less than perfect credit, they’re being hit with APRs of more than 22%.

Wallet Share

Here’s the tell-tale signs that let you know this are definitely changing. According to some insiders, there will soon be an announcement, at least from Barclays and eventually other banks, that will provide details on how card members can vote on various goings-on as well as provide insight as to what they would like to see offered. It’s a risk, and there’s still much to be done, but insiders are saying they will publish profits and losses on the website for its community.

Other credit card companies are beginning to take notice, too. Chase, known for its rich rewards credit cards, hopes its Slate card will draw some of those consumers as well.

What’s more important? A no-frills offer that lets consumer and credit card company waltz off into the sunset with no complications or is it a credit card offer that allows you to excitedly plan a vacation every year with the airfare costs deducted via your rewards points? Bottom line – it all comes down to the consumer and what each values.

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