With its first birthday coming up, we take a look at one of TD Bank’s youngest credit card offering – the TD Payment Plus Visa credit card. It utilizes a peculiar format to encourage cardmembers to make payments that are larger than their minimum balances.
Incentives are becoming more of a common sight in financial products to make them more attractive.
The TD Payment Plus Visa card’s primary feature is a statement credit of equivalent to a portion of interest charged when a certain percentage of the balance is paid. Essentially, the incentive is a lower effective APR, which certainly comes in handy for consumers who regularly maintain a credit card balance.
TD Payment Plus Visa Card Details
At first glance, the TD Payment Plus Visa card is a plain credit card that has an alarming interest rate – a variable 21.24% APR.
However, its biggest selling point is the ability to earn money back with a statement credit.
- Pay 10% or more of your current balance and get a statement credit worth 50% of that month’s interest charges.
- Pay 5% to 9.99% of your current balance and get a statement credit worth 25% of that month’s interest charges.
- No annual fee.
TD Bank will tell cardmembers how much they need to pay to get the statement credits.
Undoubtedly, the TD Payment Plus card entices you to pay more than the minimum balance. However, notice that it doesn’t entirely present any rewards for paying the balance in full because you don’t pay interest when you pay off the entire balance.
Therefore, this card is catered towards consumers who tend the carry a balance and lack the initiative to pay off bigger parts of their balances.
If you pay at least 10% of the current balance, the statement credit earned would yield an effective APR of 10.52%, which is relatively in-line with rates on comparable low-interest credit cards. Paying 5% to 9.99% of the current balance would equal to an effective APR of 15.93%.
However, given you have a solid credit history, it would be a better move to opt for a low-interest credit card such as the Discover More card, which offers an APR ranging from 10.99% to 20.99%. The reason behind it is: in the event you cannot pay 10% of your balance, you are stuck with a large interest charge.
Otherwise, the TD Payment Plus card would be appropriate for someone who needs that little push to make bigger payments towards their credit card debt.