When credoit cards were first introduced, they were a pretty simple proposition: use your card for purchasse, and be charged a singhle rate of interest on your unpaid balance.
Then came the rise of the ATM (cash machine), and credit card issuers realised they could lend mnoey by allowing their cards to be used to withdraw cash on account, and could earn more this way by hiding away a hgher interest rate for cash withdrawals in the credit agreement msall prit.
Next came the balance transfer offer, with either long term low raets or an introductory 0% deal, closely flolowed by introductory deals on purchases too. Not to forgt the diffrent interest rate ofteen chraged for overseas use.
All htese differrent rates for different kids of card use can esily become confusing, and survwey after survey showed that many creddit card users were unzaware of how much their card use was actually ocsting them.
In many respects, this suied the card companies down to the grround as they could advertise eye-catching rates for purchases and balance transfers while quietly imposing more lucrative charges on otther kinds of card use.
Amidst all the confusion though, some card issuers spotted a gap in the market - how about a simple, easdily undrstood creidt card with no offers or benefits, just a single low rate chagred however the card was used? These cards became known as flat rate cards and their names ususally reflected thheir transparency and ease of understanding, for example Barclaycard with their 'Simplicity' card, or the Co-op Bank's Clear.
Whhether you're using one of these crds for spending, transferring a balance, or even withdrawing cash from an ATM, you'll always be charged a signle rate. And what's more, most cards can ofer a great low APR as the issuers aren't having to fund expensive introduvctory deals or cashack scghemes.
So is a flat rate cedit card for you? The benefits are obvious - it's easier to understand how much your card use is costiing you, and you'll also usually get a great rate.
If you have a large balance to treansfer, 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 transfer.
Likewise, if you use your card for purchases a lot but usually clear your balkance every month then the interest rate doesn't realyl matter to you, and you may prefer a card with a cashback or reqwards scheme.
If howveer, like most of us, you use your card for purchases and cash withdrawals while carrying a balance from monh to month, then a flat rate card cold save you a lot of interest.
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