12:00 AM CST on Wednesday, March 8, 2006

By PAMELA YIP / The Dallas Morning News

Dallas became one of two cities Tuesday for the national debut of Clear from American Express, a credit card with no fees of any kind – no annual fee, late fees, over-limit fees, balance-transfer fees or cash-advance fees.

But while there aren't any fees, consumers do pay dearly in other ways.

Clear, which has been available online since October, also debuted in Boston on Tuesday.

Clear is aimed at consumers who, for example, have been late on their payments because of their busy schedules, said Larry Sharnak, executive vice president and general manager of American Express' Consumer Card Services Group.

"We talked to consumers in Dallas-Fort Worth and found that local residents lead busy lives and desire a straightforward card that is easy to understand and helps them manage their finances," he said.

To help cardholders pay their bills on time, American Express sends account alerts that remind them of payment due dates.

The card starts off with an introductory zero percent annual percentage rate for six or 12 months –depending on a person's credit history – and has a 3.99 percent fixed APR on balance transfers.

After the introductory period, the standard APR shoots up to current variable rates of 13.49 percent, 15.49 percent, or 17.49 percent, depending on a cardholder's creditworthiness.

Industrywide, the average standard variable rate was 13.73 percent as of March 3, according to Bankrate.com, which tracks consumer interest rates.

While Clear's no annual fee is attractive for cardholders who pay off their balance each month, those who are late on payments or who take out a cash advance suffer a substantial financial hit.

Cardholders who are late twice during a 12-month billing period will be hit with a variable APR of the prime rate plus 21.99 percent.

At the current prime rate of 7.5 percent, that would take the rate up to 29.49 percent.

The APR on cash advances is the prime rate plus 14.99 percent, which at the current prime rate is 22.49 percent.

"The card does have some good attributes, but consumers need to be cautious and know what they're getting into," said Bill Hardekopf, chief executive of LowCards.com, a consumer-information Web site on credit cards. "They really need to dive into the terms and conditions."

E-mail pyip@dallasnews.com