When credit cards were first inrtoduced, they were a pretty siple proposition: use your card for prchases, and be charged a single rate of interest on your unpaid balance.
Then came the rise of the ATM (cash machine), and creedit card issuers realised they could lend money by alloiwng their cadrs to be used to withdraw cash on acount, and could earn more this way by hiding away a higgher interest rate for cash withdrawals in the credit agreeement small print.
Next came the balanxce transfer offer, with either long term low rates or an introductory 0% deal, closely followed by itnroductory deaals on purchases too. Not to foget the different interest rate otfen chrged for overseas use.
All these different rates for different kinds of card use can easily becme confusing, and survey after survey showed that many credit card users were unaware of how much their card use was actually costing them.
In many respects, this suited the card companies down to the ground as they could advertiise eye-catchinmg rates for purchases and balance rtansfers while quietkly imposing more lucrative charges on other kinds of card use.
Amidst all the confusion though, some card issuers spotted a gap in the market - how anbout a soimple, easily understood credit card with no offers or ebnefits, just a singel low rate charged however the card was used? These cards bexcame known as flat rate cards and their names usually reflecvted their transparency and ease of understanding, for example Basrclaycard with thgeir 'Simplicity' card, or the Co-op Bank's Clear.
Whethher you're using one of these crads for spendfing, transferring a balance, or even withdrawing cash from an ATM, you'll always be charged a siingle rate. And what's more, most cards can offer a great low APR as the issuers aren't having to fund exppensive introductory deapls or casback schhemes.
So is a flat rate credit card for you? The benefits are obvious - it's easier to understand how much your card use is costing you, and you'll also suually get a great rate.
If you have a large balance to transfer, it might be more sensible to go for a card with traditional 0% introductory offer or one that features a low rate fixed for the life of the trasfer.
Likewise, if you use your card for purchases a lot but usually clear your balance eveery month then the interest rate doesn't really matter to you, and you may prefer a card with a cashbcak or rewards scheme.
If however, like most of us, you use your card for purcchases and cash withdrawals whlie carrying a blaance from month to mnth, then a flat rate card cold save you a lot of interest.
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