What Is a Plain Vanilla Card?

A plain vanilla card is a basic credit card with no perks and few or no fees. While plain vanilla cards are generally the same—they lack special features—from one financial institution to the next, the card’s credit limit depends on the cardholder’s creditworthiness.

Key Takeaways

  • Plain vanilla credit cards are a basic offering—they come with no perks, but have few or no fees and potentially lower interest rates depending on your creditworthiness.
  • They can be a good option for borrowers looking to improve their credit score or build a credit history.
  • Plain vanilla credit cards can be a reasonable option, but they aren’t always the right choice since cards with rewards and other perks do offer some great benefits.

Understanding Plain Vanilla Cards

Plain vanilla credit cards, along with other plain vanilla financial products, represent a base standard that products build on. Plain vanilla is usually the most basic form of a product.

With a plain vanilla credit card, the terms and conditions are very clear. This makes it easy for a cardholder to use and for the credit card company to manage. Plain vanilla cards typically have few or no extra fees, such as an annual fee.

Plain vanilla credit cards, also called no-frill credit cards, can be good for consumers for several reasons. In general, no-fee cards come with much lower costs than a card that charges annual fees. Plain vanilla credit cards have very clear terms, which make it easy to understand the interest charges on each statement. Many consumers like these cards because there is no need to decipher complicated fine print. These cardholders may also prefer not to bother with credit card rewards programs or may not spend enough to earn meaningful rewards.

No-frill cards are offered by a variety of card issuers, including American Express, Citi, and Chase. Many credit unions also have plain vanilla credit card options.

While plain vanilla credit cards are generally consistent across financial institutions, that does not mean that they offer the same terms. Moreover, a card’s interest rate usually will depend on the cardholder’s credit score, so not all cardholders will receive the exact same rate.

Plain Vanilla Credit Card Terms

Plain vanilla cardholders often form the basic standard for network processors when they begin negotiations with potential issuers. Issuers work with their desired network processor to build out a card offering that is most appealing to their customers. Often, a plain vanilla credit card will have low to intermediate credit requirements. The somewhat lower standards can make these types of cards a good option for borrowers with fair credit or prospective cardholders looking to build their credit history.

As with all credit cards, the issuer can decide how they plan to charge interest. Not all plain vanilla cards will use the same method, so this can be one area to review when applying for this type of card. In general, as with other credit cards, it is usually best for the cardholder to pay the statement balance in full to avoid paying interest on an outstanding balance.

Advantages and Disadvantages of Plain Vanilla Cards

While plain vanilla cards offer many advantages, such as simplicity, they may not necessarily be the best option for every consumer. Plain vanilla cards beat out high-annual-fee cards. They can also come with reasonable levels of interest, sometimes much lower than rewards cards. However, these cards usually don’t beat out some of the big advantages that can come with promotional and rewards card offerings. You also won’t be using these cards at your favorite retail stores to earn reward point discounts.

The best promotions and rewards programs are typically only available for borrowers of higher credit quality. Closed loop retail reward program cards can be an exception, since they have somewhat different customer targets.

It’s a good idea to look into the full array of options available before just settling with a plain vanilla card that may have the same interest rate as a card that offers rewards and other perks.

Plain Vanilla Cards vs. Rewards Cards

In general, plain vanilla cards can be an alternative if a borrower doesn’t qualify for a high-profile rewards card from a major credit card issuer, but many reward programs don’t require anything of the cardholder—just spending. For borrowers who qualify for cards with perks and plan to spend regularly, a promotional or rewards program is usually always the best bet if the interest rate is reasonable.

Promotional offers can come with 0% interest over an introductory period, which can mean no interest and no fees. Rewards programs, specifically cash-back programs, usually offer cardholders a rebate for each purchase.

In another example, consider a credit card that offers $500 cash back after making $5,000 in purchases in the first three months. If a high spender qualifies for this $500 cash-back promotional option, then they may find the cash-back offer a better fit than a plain vanilla card. In this instance, it can also be worth taking a few extra steps to understand the perks and watch spending a little more closely to get the $500.