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TD Banknorth credit card offers lower APR for larger payments

Jeremy Simon

Consumers have been earning airline miles, cash back or points on their credit card purchases for some time. But issuers have begun putting a twist on credit card incentives. Instead of giving cardholders something in exchange for credit card usage, certain banks now reward cardholders for the way they make their credit card payments. TD Banknorth’s new Simply Flexible credit card provides rewards for offering up more than just the minimum monthly payment.

Simply Flexible charges an interest rate of 7.99 percent on purchases, well below the 11 percent average currently charged by low-interest cards. But to qualify for it, cardholders will need to make a monthly payment equal to 10 percent or more of their revolving balance.

According to a press release from TD Banknorth, the credit card provides several gains to cardholders, who are rewarded for paying more than the minimum balance with lower interest rates, the chance to pay off their balance faster and a benefit to their credit rating. These are all worthwhile advantages.

Of course, TD Banknorth isn’t doing this out of the goodness of its corporate heart. In an article on the Simply Flexible card in MediaPost’s Marketing Daily, David Robertson, publisher of the credit card industry newsletter The Nilson Report, explained that Discover offers a similar product. Robertson highlighted two advantages provided to TD Banknorth by the Simply Flexible credit card. “First, it hurts a competitor by taking away one of its customers. And second, by adding a customer who already has run up a $2,000 or $3,000 balance, they’ve got an instantly profitable account — they don’t have to wait for the consumer to build up a new balance,” he said.

While banks are bound to trumpet the benefits of such a product to cardholders, consumers would be better served by always paying off their monthly balance in full. Of course if they do pay in full every month, the card issuer doesn’t make money on a revolved balance, lower APR or no lower APR.

For consumers who must revolve a balance month to month, a low interest credit card will nearly always trump a rewards credit card, since the high APRs on rewards cards tend to offset any airline miles, cash back or other earnings. In other words, do the math to see if you will be able to make those “10 percent or more” monthly payments on a regular basis and compare the TD Banknorth card’s APRs (both when paying above 10 percent and under 10 percent) with those offered by other low interest plastic.

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  • lucie

    hi I have a 2 credit card that I would like to put them together in another word balance transfer to a credit card at a lower interest I would close the other credit card and us the one with the lower interest……thank you

  • Jimmy Tomasi

    Is it hard to get a credit card (not debit card) thru TD Banknorth, if the person has limited or bad credit history, but DOES have at least one savings and one checking account with their local TD Banknorth branch? If so, would it help if the existing accounts had a certain amount of money in them as a sort of “secured credit” to help qualify for an unsecured credit card to enable building credit history? Or even a CD account as a type of collateral to assist in qualifying for the unsecured card? Thank You for your time. Respectfully, Jimmy Tomasi

  • Jimmy Tomasi

    Is it better to have 2 credit cards with $3,000 on each one, or 1 with total of $6,000 if both cards have the same APR on them?

  • David Inman

    how do I apply for the simply flexible card?
    is there a fee for balance transfers?
    is there a minimum $$ amount fot a balance transfer?
    thank you.

  • Tom

    Hi, to reply to Jimmy Tomasi, just in case any other BN customers are here after this. I applied for a secured loan while having 50,000 at TD…they denied me, moved the money to Bank of America who said yes. bank North has a very slick ad campaign , but in the end, I was very unhappy.