'Plain vanilla' credit cards: 5 reasons to choose one

By Dana Dratch

5 Reasons to choose a 'plain vanilla' credit card Juan Rodriguez/


5 Reasons to choose a 'plain vanilla' credit card Juan Rodriguez/


It’s not a question you expect when you shop for a credit card: What flavor would you like? But it’s one you should ask yourself if you want to get the best deal.

If you’re looking to keep things simple, you might opt for “plain vanilla.” The term refers to credit cards that don’t earn points, miles or cash-back rewards. Typically, they also don’t have annual fees, they may be easier to qualify for and may offer lower rates than their multiflavor counterparts.

A sping 2016 analysis by Credit Suisse indicates the cards are popular with card issuers, too. Of the solicitations mailed to consumers from January through March, more than 30 percent were for plain-vanilla cards. That’s up from about 17 percent five years ago, Credit Suisse said.

So is vanilla the right choice for you? Consider:

1. You may get a better interest rate.
“Usually a plain card will offer you a better rate because the issuer doesn’t have to pay for all those rewards,” says Ruth Susswein, deputy director of national priorities for Consumer Action. “If you know you’re going to carry a balance you may be better off with a plain-vanilla card.”

If you think you could carry a balance, or if you’ve ever carried a balance in the past, “you should be most concerned about the APR” when you shop for a new card, says Susswein.

“If you know you’re going to carry a balance, you may be better off with a plain-vanilla card,” she says. For many consumers, the interest rates they pay on balances cost more than they gain in points or miles.

And if you end up with an unintended balance, “You may have less to pay back because of the lower rate.”

The big problem for consumers: You won’t know your APR until you actually receive the card. And, while you can look at the range of rates a card offers, it’s usually a pretty wide margin.

So figure you won’t get the very lowest APR, she says. And, unless there’s something wrong with your credit, you won’t get the highest one, either. As you shop, ask yourself if those rates in the middle would be a good fit.

2. The card could cost less.
Shopping for a new card? “Look at the cost as part of your evaluation,” says Susswein. That includes the interest rate on the average balance you carry, for as long as you typically carry it. (Just look at your last year or two of card statements.)

That price also includes any annual fees and penalty fees, especially for those credit card “sins” you’ve committed in the recent past. Your year-end statement should tally up your fees and interest for the year.

If you want to transfer a balance, is there a fee for that? And try to find out if you get a credit line large enough to accommodate the amount of debt you want to move, says Susswein.

Your bottom line: What are your current cards costing you? And what is the new candidate promising?

Vanilla credit cards

3. It might be easier to qualify.
“A lot of people may prefer the ones with all the bells and whistles, but they may not qualify,” says Nessa Feddis, attorney and senior vice president for the American Bankers Association. “Rewards cards are tougher to get,” she says.

So a plain-vanilla card can be an option for someone who is new to credit or who is recovering from bad credit. And that’s probably why issuers like these cards, too. It allows them to reach out to potential customers who might not qualify for a rewards card, says Feddis. Issuers “are all about getting new customers.”

But, Feddis warns, card issuers have cut back on mailers as a marketing strategy. So an uptick in offers for plain-vanilla cards doesn’t necessarily mean that the cards are getting more popular with issuers, she says. “It may be because that’s how they get that particular population.”

It’s a good way to get the consumer’s attention, too – especially consumers who believe they won’t qualify for a rewards card, says Bruce McClary, spokesman for the National Foundation for Credit Counseling.

With other offers, if “a consumer thinks they have no chance at that, they just throw them in the trash,” he says.

4. You want something simple.
Tired of logging on to your credit card account to puzzle through rows and rows of numbers charting your rewards or miles? Sometimes even the most creditworthy individuals just want to make their financial lives easier. So a plain-vanilla card can be a good option, says McClary.

Mark Foster, director of education and spokesman for Consumer Credit Counseling of Arkansas, agrees. Plain-vanilla cards could be “a good choice for people who don’t want or need airline miles,” but instead want “a low, fixed rate,” he says.

“It’s a tool that’s simple, and it’s simple to look at the bill,” McClary says. “You don’t have all the columns tallying your points. It’s easier and less confusing.”

That can also make it a good choice for people who are new to credit, and those looking to streamline their finances, he says.

5. You want a card ‘just in case.’
You want a credit card, but you’re not planning to use it frequently. Instead, you want a “just in case” card, says McClary. It might be for sporadic travel, occasional online purchases or just so that you have a credit card to build good credit.

If that sounds like you, then a plain-vanilla card, with no annual fees and no activity minimums (like some of the elite cards), is likely your best option, says McClary.

Many of the vanilla cards have no annual fees, no required minimums and a lower APR, making them a good bet “for someone who’s not intending to use it a lot,” he says. “It could even be your emergency card that would be on standby.”

See related: Carrying a balance? No rewards card for you!5 questions for picking a rewards card – and 1 that shouldn’t matter, Why credit limits aren’t revealed until after you get the card

Published: July 15, 2016

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Updated: 10-23-2016

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