Standard or plain vanilla credit cards are credit cards that have no rewards and no frills. They are not only easy to understand but are less complicated as well. A standard card allows the user to maintain a revolving cash balance to up to a certain credit limit. This credit amount can be used when a purchasing transaction is made and will be provided again after the payment has been made. The balance outstanding at the end of the month is charged at a nominal rate. These credit cards holds the feature of minimum payments which is required to be paid within a specified time period or within its due date so as to avoid late payment penalties.
Standard or “ Plain-Vanilla ” credit cards
The underlying concept of standard or plain vanilla credit cards is to make the banking system easy and plain. Rather than allowing the lenders to incorporate various incomprehensible terms in the form of paragraphs within legalese, plain vanilla credit cards have shorter as well as readable contracts. Standard or plain vanilla credit cards make lenders to clearly mention the risks and costs of the credit involved. If they attempt to trap the consumers or trick them, they will not be rewarded by the market forces. Although, in these cards, the cost of credit cards might rise however, since there are no traps and tricks, the number mentioned on the envelope will be considered as real. In addition to this, a plain vanilla card will force the competition level to incorporate friendly terms and lower costs within credit card transactions.
The idea of introducing standard or plain vanilla credit cards were not opposed by many people as everyone likes to enter into shorter contracts. In order to promote these credit cards, the Obama Administration incorporated CFPA to handle its promotional aspects. The function of CFPA will be to monitor the execution of the safe and comprehensible contract.
In the recent few years, there rose many opponents of the card and there evolved n environment of hate-hate relationship. They were of the opinion that plain vanilla is a fancy term for the government for selecting products for customers. Moreover, they thought that these cards would destroy the level of innovation. They also said that these cards will mean that the consumers are disillusioned from choosing between more complex products that are more desired.
The current market situation regarding standard or plain vanilla credit cards are based upon a love-hate relationship. Plain vanilla cards are loved in that when it embraces it at least when speaking in terms of marketing. These cards are an excellent way of starting up your credit record since they do not require many formalities to be completed. The best thing is that if they are not offering any rewards or frills, there is also no space for tricks and traps which can eventually increase the cost of credit to the skies. Many people opt for plain vanilla cards for giving a boost start to their credit records along with maintaining their credit scores and reports.