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Is New, No-Fee American Express Card Right for You?

by Peter Andrew
Is New, No-Fee American Express Card Right for You?

Editor’s Note:  This limited-time offer has expired. 

Too good to be true? American Express has launched its first credit card that charges no fees of any kind. The “Clear from American Express” credit card does not charge fees for late customer payments or for going over the card’s credit limit. In addition, the new Clear card offers a shopping reward program at the industry standard 1% rebate level, no annual fee, and a free credit report and credit score.

What’s the catch? None, really. But no fees doesn’t mean no interest — consumers who carry a balance should note that Clear from American Express offers an ongoing interest rate a bit higher than some other credit cards. And while no fees for late payments or over-the-limit fees is certainly better than being charged for those same infractions, this freedom could also put less-than-conscientious payers into a debt hole even faster than credit cards with a forced payment schedule.

How so? Well, read the fine print and you’ll see this: “Your account is reviewed monthly and will be considered in default if minimum payments are not timely paid two times during any portion of the 12-month period ending with the Closing Date of the current billing period. If your account is in default, you will be assessed a variable APR of the Prime Rate plus 21.99% for all balances.” So, while you may not get charged a “fee” for late payments, a couple of late payments in the same year will quickly push your card’s APR over 27% or even higher.

That would quickly eat up any savings you achieved by avoiding late fees. Clear from American Express may be right for those who generally make timely payments, but don’t want to feel panicked if they can’t get the check in the mail on time one month. However, if you find yourself struggling to get those payments in on time every month, this card “clear”ly isn’t for you.

Disclaimer:The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.

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