There isn’t that much innovation going on in the credit card world these days. So when a credit card issuer does something different, it really stands out.
The TD Clear Credit Card certainly stands out. In fact, it’s completely different from any other credit card on the market. Instead of charging interest, it changes a monthly fee of $10 for a credit limit of $1,000 or $20 if your limit is $2,000.
While the TD Clear Credit Card is simple and predictable, it only makes sense for folks who plan to consistently carry a relatively high balance.
What Is the TD Clear Credit Card?
The TD Clear Credit Card is offered by TD Bank. There are actually two TD Clear cards: a TD Clear card with a $1,000 Credit Limit and a TD Clear card with a $2,000 credit limit.
The $1,000 credit limit card has a $10 monthly fee, or $120 a year. With this card, there is a predictable minimum payment of $45, inclusive of the monthly fee.
The $2,000 credit limit card has a $20 monthly fee, or $240 a year. This one has a predictable minimum payment of $70 minimum payment, also inclusive of the monthly fee.
Instead of charging interest like most credit cards, TD Clear charges these set monthly fees. The monthly fee is charged regardless of whether you carry a balance or not, so it only makes sense if you plan to carry a high balance.
There’s one more catch. To get this card, you must be a resident of one of the following states or districts:
- Washington, D.C.
- North Carolina
- New Hampshire
- New Jersey
- New York
- Rhode Island
- South Carolina
This geographic region is coterminous with TD’s physical branch footprint. It doesn’t currently offer credit cards to people based outside this region, though that could change in the future.
What Sets the TD Clear Credit Card Apart?
This card has two features that help it distinguish itself from other credit cards in its category.
- $0 transaction fees or penalty fees. This card doesn’t charge a balance transfer fee, a cash advance fee, a foreign transaction fee, a late payment fee or a returned payment fee. That’s pretty rare for a credit card.
- No APR. This card uniquely doesn’t charge interest. Instead, you have a set minimum monthly payment, which includes the monthly fee. If you tend to carry a balance on your cards, this could be enticing.
Key Features of the TD Clear Credit Card
The TD Clear credit card offers no interest, no transaction fees, and no penalty fees, plus basic additional benefits.
This card doesn’t offer a sign-up bonus. Since it has no rewards program, it’s unlikely to offer one in the future.
This card has no rewards program. It’s designed for people planning to pay off charges over time, which defeats the purpose of the rewards premium.
This card doesn’t charge interest and thus doesn’t have a regular APR. However, to assess the cost of carrying balances with this card and compare it to more traditional credit cards, you can calculate the monthly fee as an annualized interest rate based on your charges.
The $1,000 credit limit version of this card charges a $10 monthly fee, or $120 a year. The $2,000 credit limit version of this card charges a $20 monthly fee, or $240 a year.
This card doesn’t charge a balance transfer fee, a cash advance fee, a foreign transaction fee, a late payment fee, or a returned payment fee.
This card doesn’t offer too many benefits, but it does offer cell phone protection, emergency card replacement and Visa Zero Liability.
This card requires good or better credit to qualify. If your FICO score is below the 680 to 700 range, then you’ll likely have trouble being approved
Pros & Cons of the TD Clear Credit Card
Unfortunately, TD Clear’s downsides outweigh its upsides. But there’s still some good here if you know where to look.
- No official interest charges
- Predictable fees
- No deposit required
- High monthly fees
- Low credit limits
- No rewards
- Encourages debt
The advantages of this card come down to simplicity and predictability.
- No interest charges. The rate won’t go up or down, because there is no interest rate.
- Predictable fees. The only real fees this card has is the monthly fee of $10 or $20, depending on the card’s credit limit.
- No deposit required. Unlike secured cards, you don’t have to submit a deposit before you can open an account.
This card’s downsides include its deceptively high monthly fees, low credit limits, and lack of incentives to pay off your charges quickly.
- High fees. $10 or $20 a month doesn’t sound like much, but it adds up. When you combine that with the modest credit limit, it’s the equivalent of paying a substantial interest rate in the 10% to 15% range, even if you consistently near your limit.
- Low credit limit. These cards are limited to $1,000 or $2,000 a month, and no more. You can’t get a credit limit increase. If you come close to maxing out your limit consistently, which is the most cost-effective way to use this card, your credit utilization ratio could be uncomfortably high and negatively affect your credit score.
- No rewards. This card has no rewards program. If you’re looking to earn a return on spending, look for a cash-back credit card instead.
- Geographic restrictions. This card isn’t available nationwide. It’s only available in areas where TD has physical branches, which is mostly on the U.S. East Coast.
- No incentive to pay off your debt. As painful as it can be to pay interest on your credit card, you always have the option to avoid interest charges by paying your balance in full. At least you do with every credit card but this one. In fact, this card only makes sense when you carry a large balance, which is not how you use a credit card responsibly.
How the TD Clear Credit Card Stacks Up
This card’s closest competitor is probably the TD FlexPay credit card, another credit card from TD Bank. Here’s how the two cards compare.
|TD Clear Credit Card
|TD FlexPay Credit Card
|$120 to $240
|0% Intro APR
|0% intro APR on balance transfers for the first 18 billing cycles
|Foreign Transaction Fee
|Good or better
|Good or better
TD Clear is more expensive than the TD FlexPay card and lacks any sort of incentive to pay off balances quickly. FlexPay’s 0% intro APR promotion is a great deal as well. The only selling point for TD Clear over FlexPay is the lack of a foreign transaction fee.
While I can applaud TD Bank for trying something new, it’s a little disturbing to see a credit card that practically encourages cardholders to carry a balance. When you also consider that this card offers no rewards and few benefits, it’s difficult to make the case for the TD Clear card.