American Express Clear Card Review

Picture of Item Reviewed

Editor's Rating:
Intro Purchase APR Regular APR Intro Balance Transfer Annual Fee Credit Needed
N.A. $0 Average
PROS
  • No fees whatsoever
CONS
  • Only 1% cash back
Executive Summary - A card that prides itself on having no fees at all. That means no late payment fees, balance transfer fees, annual fee, over-the-limit fee etc. It is also a de facto 1% cash back card as you will get a $25 Amex shopping card after spending $2,500 on the card.

The American Express Clear Card was first introduced in 2005 and back then, it was a unique credit card which prides itself on having no fees at. Yes, NO FEEs. There is no annual fee, late fees, over-the-limit fees, cash advance fees, balance transfer fees etc. There is also a reward program where you will get a $25 American Express shopping card for every $2,500 that you spend on your card. This card is still around today and it is still quite unique in the sense that aside from one card, no other cards has the guts to forgo the fees that they charge (like the late fee, over-the-limit fee etc).

But The Card Is Not Alone - The card that comes close to them is the Citi Simplicity Card. City Simplicity was issued not long after the Clear Card and also had no late fees. For some reason, the card was pulled only to be relaunched in 2011. But the Clear Card was better than the Citi Simplicity in a couple of ways.

Firstly, they did not charge any balance transfer fee whereas the Simplicity Card did. But having said that the Simplicity Card tend to have long 0% Introductory deals for balance transfers whereas you hardly find any good long balance transfer deals for the Clear Card.

Secondly, the Citi Simplicity has no reward program while the Clear is essentially a 1% cash back card. It's just that you do not get your cash back in "cash". But rather, American Express will issue you a $25 "Amex Shopping Card" (which is like an Amex Gift Card) when you have earned 2,500 points (or rather when you have spent $2,500 on your card).

Issues With The $25 Shopping Card - Upon reading some users feedback on Amex site, it appears that there are a couple of issues that you have to be aware of. Firstly, the $25 shopping card is only valid for one year. So you should not be procrastinating, but rather use them as soon as possible so you do not risk losing the card. Secondly, there have been some complaints that you have to use the whole $25 in value at once with merchant. That means you have to make a purchase that is $25 or more to use the shopping card. And lastly, American Express is not accepted everywhere so depending on where you like to shop, this card may or may not suit you.

So Why Settle For a 1% Card? - Since we know this is basically a 1% cash back card, the question is should we simply settle for that? There are many better cards around. Back when it was launched, there was the Citi Dividend Card or the Amex Blue Cash. Today, the Chase Freedom Card, Discover More Card all offer better cash back features. I could go on for a long while highlighting the difference between these better cards and the Clear Card. But I will not do it for the moment because there is a reason why folks still apply for the Clear Card.

Starting Out With Amex? - While this is not official from American Express, many cardholders consider the Clear card to be one of Amex's starter cards for folks who do not have a long or extremely stellar credit history. The other cards that are normally talked about are their Green charge card and the Zync. From what we can gather from users who have had this card, it appears that you would be best trying to get this card to start with Amex if your credit is not super, but still ok. In fact, lots of folks move on after a while with this card to the Amex Costco or the Blue Cash.

But please bear in mind that having no late fees means you can just simply pay your bills late. Your credit score will be affected if you default or are very late on your bills.

Should You Get The Clear Card? - At the end of the day, this is a simple 1% cash back card. You should know by now that there are better cash back cards out there. But this card has been known "unofficially" to be a good starter card with amex if you do not have five star credit. It has no fees whatsoever, has a simple cash back formula and will help you get started with Amex. If you already have great credit, then you might as well start with the Amex Costco or the Blue Cash Everyday or other higher rebate paying cards.

If you do get this card, bear in mind that this should not be a reason to "pay late" even though there is no late payment fee. In you are over due on your credit card by 60 days, issuers will report that to credit bureaus. You want to be setting up automatic payments to make sure you are never late on your payments.