Walletpop round-up: Worst credit cards
Filed under: Credit, Debt, Economizer, Credit cards
Break out the rotten tomatoes. This is Walletpop's roundup of the priciest, sneakiest and just plain lousiest credit-card deals out there. Trust us, there are a lot of cards floating around the bottom of the barrel, so it took a lot of effort to find the ones you probably want to avoid at all costs.Interest rate: If your credit isn't stellar, you can be looking at paying 20% or more for the privilege of whipping out the plastic. (Even if you have great credit, some cards will be oh-so-happy to sock you with a rate of 15% or so.) For real sticker shock, we checked out co-branded store cards, which typically have higher rates. Case in point: The Gap Visa card has rates that start at 18.24%. That could tack quite a bit onto the price of that pair of khakis. We also looked into the Best Buy Reward Zone MasterCard, issued by HSBC, but they won't even give users information about interest rates until they actually apply! Thanks, HSBC; you've forced us to leave it to our imagination, and what we're imagining is pretty scary.
Annual fee: To be fair, several American Express cards made our best list, but we've got a worstie here, too. With a whopping $5,000 initiation fee plus a $2,500 annual fee, the American Express Centurion Card wins this one, hands down. Luckily, this card is issued by invitation only, so you'll probably never be faced with the agonizing decision of whether or not to drop the price of a cheap used car every single year for the privilege of using this card. For that reason, we're nominating a second worstie in this category: the Visa Black Card issued by Barclays. It's got an annual fee of "only" $495 and an APR of 13.24% -- a higher rate by several percentage points than our best pick.
Cash back: Ideally, you want a card that rewards you for using it -- not for racking up a big, honking balance that hangs over your head every month. And yet, that's just what the Discover Motiva card offers. [Discover Card contacted Walletpop to correct an inaccuracy in the original text. The correct description of the reward program follows.] Users earn a mere quarter of a percent cash back for the first $3,000 in purchases annually, and 1 percent after that. The rub is that Discover replaced their accelerated rewards program, which gave users five percent back on categories like hotels, restaurants and gas stations for three months at a time, with a new reward program that rewards you twice-yearly for paying on time - based on how much interest you owe. The bigger your outstanding balance (and the more interest you owe), the bigger your reward. In these times when so many Americans are in financial crisis, we just don't think it's responsible to give shoppers an incentive to carry more debt. (The Consumerist blog has also dug up evidence that some Citi-branded cards have started this interest-based reward practice as well. Get details at the link.)
Points/rewards: A card with a high APR that promotes gambling at the same time ... what's not to revile? The American Dream MasterCard issued by HSBC wins the razzie here. The rewards program issues you points, but you can't cash them in for anything. Instead, each point buys you an entry into a monthly sweepstakes. Seriously? Why not just get a regular cash back card and blow your winnings on lotto tickets every month? It's just dumb to rack up a credit card bill in the hopes of winning a big payday that will wipe out your debt.
Miles: Most airline-branded cards charge an annual fee of around $80 or so. The American Express Delta Reserve card makes our worst list because it has an annual fee of $450 -- plus an additional $175 if you want a second card. At 14.5%, the interest rate offered is no great shakes, either. But maybe if you have $450 to spend on an annual fee, you don't care about that.
Gas: Folks, we've got ourselves a two-fer: Both the BP Visa and the ExxonMobil MasterCard left a bad taste in our mouth. Why? The benefit of earning cash back for purchases excludes gas purchases at competing stations. In other words, swing by the wrong station to fill up and this card penalizes you. If you like to shop around to get the cheapest price on gas (and who doesn't?), these cards could seriously burn you.
Concierge: The Visa Black Card is making a second showing on this list. For the $495 it costs annually, the card's website says you get "personalized assistance of our 24-hour Concierge Service catering to entertainment, travel, business, shopping and lifestyle needs." Well, if you have a "lifestyle need" at the wee hours of the night, this kind of service might seem handy, but you don't need to be a Black cardholder to get it. Check out our best list. For info on no-annual-fee concierge cards, or get in touch with any membership association or credit union you belong to; many of them also offer similar service without the big price tag.
Reader Comments (Page 1 of 2)
10-30-2009 @ 12:52AM
Bankruptcy Ben said...
GE's credit cards have interest rates that start at 20% and their GE Money Card is 27% That's Nuts!!
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10-30-2009 @ 4:06PM
Simzww said...
Does anyone try using CASH these days? Cash is the only thing I do. Why GIVE that intrest money away when I can have it. Happy shopping.
10-30-2009 @ 2:06PM
heidi said...
all the credit card companys are bad at this point
the intrest rates are rising beyond control the minimum payments are thru the roof
they will not let the folks pay down debt at all
its all a rackett
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10-31-2009 @ 1:53PM
floyd said...
By the way, the minimum payment on credit cards is regulated by federal law. The same laws that you idiots got passed and then complain about the consequences.
10-30-2009 @ 2:34PM
RK said...
Your so right,a racket and the goverment is quite involved.I quit using them. If you don't buy they don't get your taxes.Sounds like a plan to me
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10-30-2009 @ 2:48PM
Jerry6 said...
If you look really hard at your credit cards, you will find a clause that effectively says that you do not have to pay ANY interest what-so-ever. All you have to do is pay the full amount due each month. I have been doing that since 1982, and you no what? No one has canceled me, or told me that I had to pay less than the amount due if I wanted to keep the card active.
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10-30-2009 @ 5:43PM
Craig said...
The proper word is "know" not "no."
10-30-2009 @ 2:59PM
Ralph said...
Would Coke give you a reward for buying Pepsi?
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10-30-2009 @ 3:03PM
Sean said...
The information given about the Discover Motiva card is incorrect... leading me to believe other information in this article is also less than accurate. The Discover Motiva card does earn up to 1% on purchases. However, the card is designed for someone who IS revolving a balance to get some of the interest they are paying back for making on time payments. Discover promotes paying your credit cards in full every month and will switch a reward program upon request. Get your facts right next time or keep your inaccurate opinions to yourself... you are misleading consumers.
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10-30-2009 @ 3:12PM
HSBAR said...
If you do use one airline a lot, I like the US Airways cards (Visa and MC). There is an annual fee of $90, but you get a certificate for two $99 companion fares, and a certificate for one free day in the US Airways Club. Also, you get 1 mile per dollar spent on anything, and 2 miles per dollar spent on US Airways airfare. If you charge $20,000 in one year, you get 10,000 of your miles converted to preferred status points. If you have both cards and spend $20,000 per year on each, that's 20,000 preferred miles. It takes only 25,000 for silver preferred status, which gets you free checked baggage (up to 2 bags) and free upgrades to first class when available.
Also, US Airways is part of Star Alliance so you can use your miles with any star alliance partner to go anywhere in the world.
In all, the rewards are worth far more than the $90 annual fee. If you are willing to make US Airways your preferred carrier, you can really make out with these cards.
No, I am not an employee or a stock holder in US Airways. I have been flying them for a long time and preferred since 2000. I take a few trips each year and pay as many of my bills as I can with the credit card. I pay off the balance each month. I maintain my preferred status and have enough miles to take my family of 4 to the other side of the world flying business class. Each ticket would sell for $12,000. There are no black out dates when you are preferred.
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10-30-2009 @ 3:12PM
Justme said...
Question? What is the difference between the Mob and credit card companies???
Answer: Mob leaders are jailed for loan sharking and credit card companies are protected by the government..
Solution: Either burn your credit cards/or send pink slips to your government officals.
At least the mob breaks your legs or kill you out right. Credit card companies destroy your life for almost forever and kill you very slowly.
Credit card companies and banks are the biggest gangsters and crooks ( even more than the Soprano's) this includes our goverment officals, including the president's office.
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10-30-2009 @ 3:56PM
Al said...
JCPenneys just raised their interest rate to 23.99% APR. Isn't that special. Now, my credit score will probably drop because I cancelled them!
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10-30-2009 @ 4:03PM
Jeff Gerard said...
Citicard wanted to raise my interest rate to 29.99% on a card that I seldom use. I closed the account. "Too big to fail" was and is bull manure. The American public bailed out this crooks in Washington and Wall Street, and they showed their gratitude by trying to screw everybody.
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10-30-2009 @ 4:32PM
RB said...
Hmmm,credit card companies...you mean legal thieves backed by the U.S government. Got to $5000 on my CHASE card,(out of work making some mortgage payments) they changed my due date so I couldnt make the payment on time - took me from 9% to 29.9% and proceeded to close my account...when I protested and got in there face they sued me for $5000. Ruined my gredit rating and are still calling at all times of the day and night. They are not held accountable by the U.S. government when recieving 25 billion in stimulus but continue to screw the American public. There latest play is to charge you intrest on late fees. My lotto dream is to hit it big and bring a class action lawsuit against CHASE BANK for the 25 billion they screwed the american people out of.
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10-30-2009 @ 4:32PM
Earl said...
Credit card companies, They all try tell you the same thing: "we are here, to help you, help us."
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10-30-2009 @ 5:02PM
Jim said...
It's only a matter of time before the CC co. change there tune. Most people are not using them, only the desperate ones. That combined with 13% of the CC balances are now pd. and lets not forget about the hits they are taking every day. Alot of reduced revenue for companys that need volume to survive. JMc
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10-30-2009 @ 5:04PM
Gwen said...
I pay of my credit cards every month. I hate paying interest. Once you start paying interest you never get it all payed off. Then everything you bought on sale cost you more money.
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10-30-2009 @ 5:42PM
Craig said...
The proper word is "paid" not "payed."
10-30-2009 @ 5:16PM
Butch said...
Wasn't Obama supposed to stop this credit card raping the the AMERICAN PEOPLE ? Was this part of the BAIL-OUT.Give them tax money and screw us with HIGH interest rates . Wake up America ! The Government is Not going to help the average working person.
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10-30-2009 @ 6:39PM
xmasbaby said...
i was working and established a 25 year customer with Chase. when my mother died ast year, the usps had my mail going from my townhouse in minnesto to texas and mail going to texas to minnesoto and some they returned to sender. i went to the post office screaming after 4 times to tell me where my mail., i finally got the mail going right, they apologized and wrote a letter stating that it was their fault. two of my cedit cards Chase being one). i took that to the bank and they looked at me. I said i could bring it up to date but thet refused to reopened my account. i hope that they merge with another bank and lose your job, your mother and a relation with a company for 5 years and listen to why they have messed up my credit and still want their money. well, i want my credit card back so they get $5.00 a month from me until the year 2020.
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