Clear from American Express, introduced several years ago in the U.S., is an interesting new model for a credit card.
It is a translucent plastic credit card equipped with both the traditional magnetic strip and a high-tech smart chip for tap and go style purchases (which will likely become more popular during the next decade).
The card offers new account holders either a 6-month or 12-month introductory APR of 0% — which offer you get depends on your credit history and other factors; the decision is entirely up to American Express (I got the 6-month promotion).
As long as you make all the minimum payments on time, the intro APR will remain at 0% until its set expiration date, at which point it will jump to the regular purchase APR. If you miss more than two payment due dates in any “rolling” 12 month period, you will go into default and pay a very high interest rate — standard practice for credit card companies.
What makes Clear so extraordinary, though, is not the interesting see-through card design (it does look kind of sexy; I’ve gotten comments from bartenders about it) or the introductory APR offer.
Clear advertises that it charges cardholders no annual fee (a big plus, considering many AmEx cards have an annual membership fee), no late fees, no over-the-limit fees, no balance transfer fees (although balance transfers will not have 0% APR), and no fees of any kind… even if you go into default, you won’t pay a penalty, other than the outrageous default interest rate.
The card is an experiment in a more transparent kind of relationship between cardholder and credit issuer. As long as you pay on time, you don’t need to worry about any shady fly-by-night fees. In fact, I recommend paying every month’s balance in full — do this, and you will take advantage of the card’s 28 to 31 day grace period meaning you will pay no interest at all in purchases.
American Express offers easy linking to one’s checking account, and you can even set up AutoPay as I have so that each month’s balance is paid in full automatically. This definitely takes a lot of pressure off, and forces me to only spend within my means.
Clear’s rewards aren’t as stellar as American Express’ Blue Cash card, but it is still pretty impressive: a free $25 American Express cash gift card is mailed to you every time you make $2,500 in “eligible” purchases (a balance transfer or cash advance won’t count as eligible, only true purchases count).
I am currently using my Clear card essentially as a debit card; at the end of each billing cycle, I pay the balance in full via electronic funds transfer from my checking account. So I pay no interest and work toward the $25 gift card. There is no limit to how many $25 gift cards you can accrue.
This achieves two goals: I am basically giving myself a 1% effective discount on everything I purchase, since I get a $25 gift card for each $2,500 I spend (allow 7 to 12 weeks for each card to arrive after you hit eligibility).
Secondly, this provides a nice layer of “protection” — it is well-known that credit card companies provide really good fraud protection. All I have to do is call them if I see any unauthorized charges. Getting unauthorized charges removed from a debit card, on the other hand, can be a time consuming nightmare.
Plus, American Express has legendary customer service and in many cases when you purchase something with a warranty, American Express automatically extends the warranty coverage by another full year.
Between ease of use, safety, and the 1% back I no longer use cash or my debit card — I leave the debit card at home and only use it when I need to deposit a check at an ATM machine.
I recommend you consider the same use for your American Express card ONLY IF you know you can pay off your balance in full each month. I do not advocate irresponsible spending or charging above your means. But if used responsibly, Clear is a true pleasure.
I have owned credit cards in some form for the past six years, and now only use this one. It’s simply easier. There is only one drawback: some merchants don’t accept American Express, but so far this has only happened to me at one location.
Before I leave you, I wanted to suggest one more thing. When you log in to your American Express account on their Web site, you can set up free account alerts which can be sent to your mobile phone via SMS text or to the email account of your choice. I highly recommend you do this. I personally have American Express send me an alert five days before my payment is due, just in case I forget or the AutoPay doesn’t go through. I have another alert that shoots me a text message every evening letting me know how much was spent on the card that day. This is a great way to guard against fraud, and it also helps you maintain a personal budget — if you go over one day, you will know that same evening… this will hopefully shame you into being more frugal in the future!
Anyway, I highly recommend the Clear card. I would give it an 8 out of 10. The card itself is not quite as durable as I would have hoped and scratches easily, but the rewards are solid and it’s nice not to have a credit card company hitting you up for obscure fees and annoying charges right and left.
If you are looking just for rewards, consider American Express Blue Cash, which is a very similar offering with a better rewards structure. The card design is also somewhat similar. I hope to review that one soon, once it arrives in the mail!
