Have you seen ads for the TD Clear Card and wondered if it’s right for you? With its no-interest structure and predictable monthly payments, it certainly sounds enticing. But there may be some drawbacks to consider as well.
In this blog post, we will explore how the TD Clear Card works, who it’s best suited for, and some potential alternatives you may want to consider.
An Overview
The TD Clear Card has a unique fee structure that charges a monthly membership fee instead of interest on balances. This can make budgeting easier since your payments stay the same each month. But depending on your spending and repayment habits, this card could end up costing you more over time.
How the TD Clear Card Works
The TD Clear Card has an unusual fee structure compared to most credit cards. Instead of charging interest on balances you carry from month to month, there is a monthly membership fee. Here are the key details:
Monthly Fee vs. Interest
- $10/month fee for a $1,000 credit limit
- $20/month fee for a $2,000 credit limit
- No interest charges ever
So instead of variable APR interest charges changing based on your balance, you pay the same flat monthly fee regardless of your balance. This can make budgeting simpler.
Payments and Credit Limit
- The minimum payment is 2.5% of the balance
- No credit limit increases
- Available in certain U.S. states only
One thing to note is that while minimum payments are predictable, the credit limit will not increase over time like with other cards when you improve your credit.
Benefits and Perks
While the TD Clear Card doesn’t offer rewards points or cash back, it does come with some useful Visa benefits, including:
- Cell phone protection – Covered if the phone is stolen or damaged
- Emergency card replacement
- Zero fraud liability if the card is stolen
- Complimentary Shipt membership for 3 months
So while you won’t earn any rewards with this card, having your cellphone covered if it’s broken or stolen is a practical perk for everyday life.
Potential Downsides to Know
While the straightforward fee structure is the TD Clear Card’s major selling point, there are some significant disadvantages to factor in as you decide if it’s the right card for you.
Costly Monthly Fee
The monthly fee of $10 or $20 can add up fast. Depending on your credit card spending and repayment habits, you could end up paying much more compared to a card with a reasonable APR. We’ll crunch the numbers later to illustrate scenarios where this card saves money vs. costs more.
No Rewards
With no cash back, points, or other rewards offered, the TD Clear Card falls short compared to competitors when it comes to earning something back on your spending.
Balance Transfers
This isn’t an ideal card for balance transfers from another credit card. The monthly fee can exceed the 0% promotional APR intro periods offered on many balance transfer cards. And the small credit limit of $1,000 or $2,000 prohibits transferring large existing balances.
Credit Limit Increases Unavailable
Since your credit limit is tied to the monthly fee, the TD Clear Card won’t grant credit limit increases over time. This reduces its flexibility compared to traditional cards that give higher spending power as your credit profile improves.
Cost Comparison to Traditional Credit Cards
To see if the TD Clear Card’s monthly fee saves money compared to credit card interest charges, let’s compare some scenarios.
Keep in mind we’re using the average credit card APR of 20.92% in these examples, although your rate could be higher or lower depending on your credit profile.
Carrying a $500 Balance
- TD Clear Card – $10 monthly fee = $120/year
- Traditional Card at 20.92% APR – $10.46 in interest charges = $125.52/year
For a small $500 carried balance, the TD Clear Card would save around $5/year.
Carrying a $1,500 Balance
- TD Clear Card – $20 monthly fee = $240/year
- Traditional Card at 20.92% APR – $314 in interest charges = $3,768/year
With a $1,500 balance, the yearly savings jump to around $150/year with the TD Clear Card.
Carrying a $5,000 Balance
- TD Clear Card – $20 monthly fee = $240/year
- Traditional Card at 20.92% APR – $1,046 in interest = $12,552/year
The savings for higher debt loads become more substantial, at over $12,300 less in interest charges per year with the TD Clear Card!
As you can see, the TD Clear Card saves significantly once balances grow. But if you only carry a small balance or pay in full each month, a card with rewards and no annual fee would be cheaper than paying $120+ per year.
Good Fit? Bad Fit?
Now that we’ve explored the TD Clear Card’s key details from all angles, let’s recap who this card does (and does not) make sense for.
Good Fit For:
- Paying down debt – Saves substantially on interest charges
- Carrying long-term balances – Predictability helps budgeting
- Applicants in eligible states – See the issuer website for availability
- Fair credit (660-689 score) – May have fewer low-rate options
Poor Fit For:
- Infrequent credit card users – Paying a fee doesn’t make sense
- Those with excellent credit – Better rewards cards available
- Large balance transfers – Low credit limit prohibits
- Seeking credit limit increases – Not offered with this card
So in summary, this card is best suited for those with average credit who don’t qualify for low interest rates otherwise. It can save substantially compared to cards charging 20%+ interest on medium or large balances.
But it’s an expensive proposition for infrequent credit card users since you’re paying $120+ per year regardless of your spending. And for those with great credit, there are cards with better rewards and benefits.
How to TD Clear Card Application Process
The application process for a TD Clear Card is not difficult, below is a step-by-step to make it even more easy.
- To start, gather necessary personal identification, including:
- Your Social Security number
- Driver’s license or state ID
- Any existing credit card details if you plan to transfer a balance
- Having this information close at hand ensures the online application moves smoothly.
- Once submitted, an immediate decision will let you know if you are approved. If so, you can expect to receive your new card within 5-7 business days. However, some applications require further verification, in which case a decision will be mailed to you within 30 days.
- If you already have a TD credit card, note that customers are limited to:
- One personal card
- One business card at any given time
- With the necessary documents and understanding the decision timeline, applying for a TD Clear Card online is a straightforward process that takes 5-10 minutes.
- Reach out with any other questions to receive additional guidance.
Alternatives to Consider
If after reviewing the pros and cons the TD Clear Card doesn’t seem like the best option, here are a few alternatives worth considering instead:
Wells Fargo Reflect® Card
- 0% intro APR for 18 months (then 16.74%-27.24% variable)
- No annual fee
- Cell phone protection
This is a strong balance transfer option if you need an intro 0% interest period to pay down debt.
Citi® Double Cash Card
- 2% cash back on all purchases
- $0 annual fee
- 0% intro APR for 18 months offer for balance transfers
With no annual fee and unlimited 2% cashback, this is a great everyday spending card — plus has an intro balance transfer offer.
Conclusion
The TD Clear Card offers an intriguing premise – pay a straightforward monthly fee instead of variable interest charges on balances. For some consumers struggling with debt, this predictability in payments can be valuable assistance in budgeting and paying balances down over time.
But for frequent credit card users with good credit, cards with better rewards offers and benefits may make more sense financially. The TD Clear Card’s monthly fee and lack of rewards are substantial drawbacks relative to top competing cards.
Weigh your situation carefully – your repayment timeline, credit profile, and state of residency – as you determine if this card is the right fit. Consider alternatives like the Wells Fargo Reflect Card or Citi Double Cash if you decide it isn’t an optimal choice.