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Flat Rate Credit Cards Explained

Flat rate cards are a fairly new kind of credit card, which offer a single – usually low – APR for all the different kinds of card usage.

Instead of having different rates for purchases, balance transfers, cash withdrawals and cheque payments, each transaction is charged at the same rate.

The idea of these cards is that they offer a simpler alternative to the increasingly complicated features on other cards, which can sometimes make it difficult to work out exactly how much using your card will cost you, especially since ‘allocation of payments’ means that your most expensive transactions are the last to be paid off.


It’s easy to see how much you’ll be charged for each transaction, and you don’t need to worry about introductory periods expiring. If you’ve got a large balance to transfer and you don’t think you’ll be clearing it within a few months, then you can certainly save money by transferring it onto a flat rate card, although probably not as much as with a ‘for life’ card.

Also, since there’s no introductory periods that cost the card issuer money, the standard interest is usually quite a lot lower than with a normal card. You can expect an APR of below 10%, compared to somewhere in the mid-teens range with other kinds of card.


Although the interest rate is usually fairly low, it’s still more expensive than a 0% deal, whether on purchases or balance transfers. You could still save money by making use of introductory offers on other cards, even if the offer is time-limited. A ‘lower rate for life’ card may also be a better choice for some, particularly those with balances to transfer.


As flat rate cards are a recent development, there aren’t too many examples of them available. Notable cards include Barclaycard’s Simplicityand the Clear card from The Co-op.

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