DEFINITION of 'Plain Vanilla Card'

A basic credit card with no special features or perks and no annual fee. Plain vanilla cards are basically the same from one financial institution to the next. The card’s interest rate depends on the cardholder’s credit score, and if the cardholder pays the balance in full and on time each month, the card issuer doesn’t charge any interest. The card’s credit limit also depends on the cardholder’s creditworthiness.

BREAKING DOWN 'Plain Vanilla Card'

Plain vanilla credit cards, along with other plain vanilla financial products, are supposed to be easy for consumers to understand. The terms and conditions should be clear and it should be easy to use the card without incurring fees or interest if the cardholder doesn’t carry a balance and pays on time. These types of cards are best for consumers who don’t want to decipher complicated fine print and prefer not to bother with credit card rewards programs, or who don’t spend enough to earn meaningful rewards.

Despite their simplicity, plain vanilla credit cards are not the best option for every consumer. A sophisticated credit card user might not mind jumping through a few hoops to earn cash back. Such a consumer might find it worthwhile to apply for a card that offers $500 cash back after making $5,000 in purchases in the first three months as a cardholder even though it means taking extra steps such as: being aware of when the three-month window closes and making sure to meet the spending threshold before it does. The $500 payoff is worth it to some consumers who can understand how these programs work and who don’t incur any interest or fees on their credit card purchases.

Plain vanilla cards are, however, often the best option for new credit card users who need to focus on learning to use a card responsibly. They are also often the best option for consumers who plan to carry a balance, since they tend to charge lower interest rates than rewards credit cards.

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