Consumer Comeback Blog

Credit Cards You Must Avoid at All Costs

Written by Jeffrey Trull

If you don’t always take the time to read the fine print, these terrible credit ccredit-cardsard offers prove you should.

Saying that not all credit cards are created equal is an understatement. Some cards on this list are flat-out awful. What’s wrong with them? Outrageous fees, excessive interest rates, and lackluster rewards are all “features” that you need to check out for before getting excited about your new credit card.

The news gets even worse if you have less-than-perfect credit. You may have to sift through a minefield of bad offers to find something that’s useful for building your credit without costing expensive fees and interest.

If you’re unsure what types of credit cards you should be avoiding, here are several of the worst ones by category. Proceed with caution before obtaining any of these or others with similarly-bad benefits.

Worst Interest Rate

First Premier Bank Gold Card

If you have bad credit, you might be approved for this card, but it won’t necessarily improve your financial situation at all. If you’re planning to carry a balance, forget about this card as its astronomical 36% APR is among the most expensive options out there.

There’s no trade-off when it comes to fees, either. Just to open an account you’ll need to pay a $95 processing fee followed by a $75 annual fee. The amazingly-low $300 credit limit on this card seems like a joke after getting hit with so many charges.

It’s hard to see any advantages to carrying this card. Stay away.

Worst Annual Fee Card

VISA Black Card

This card boasts a whopping $495 annual fee. If you’re into “luxury gifts” and a “patent-pending carbon card,” your substantial yearly payment will get you these gimmicks and more.

While there are other cards with higher yearly fees, the benefits of the VISA Black Card aren’t all that amazing. The 1% cash back isn’t going to thrill any credit card users at this price point. You will get lounge access and concierge service, but that’s a feature found on other cards, some of which have much lower fees, too.

Worst Rewards Card

Discover Motiva

The Discover Motiva doesn’t even come close to touching the best credit card rewards that are available. The main benefit of the card is the rewards based on the your monthly interest charges for carrying a balance. In other words, your high interest costs are slightly defrayed each month by the 5% reward you get back on your interest payments.

The Discover Motiva does offer regular rewards, too, but they’re certainly nothing to get excited about. You’ll get a pathetic 0.25% back on your first $3,000 spent annually on the card. After that, you’ll get 1%, which is about the minimum you’d look for in a rewards card anyway.

Worst Secured Card

Applied Bank Secured Visa

If you want to pay fees until eternity, this is the card for you. You’ll first be hit with a $50 annual fee. If you’re thinking that might not be so bad, you’ll still have to chalk up $9.95 each month your card is active.

All this for a minuscule credit limit of $200-$500. Plus, don’t expect any kind of interest on your despot to secure the card either, because none is given.

Worst Prepaid Debit Card

RushCard

There are several not-so-great options out there in this category, but the RushCard is definitely a candidate for the worst of the worst. You’ll have to navigate the packed table of fees to figure out what you’d like to get charged for and when.

Just getting a card costs up to $14.95. If you choose the “Monthly Plan,” you’ll pay a $9.95 monthly fee that gives you two free ATM withdrawals a month, but not much else. Choose their “Unlimited Plan” and you’ll pay a lower monthly fee yet you’ll have to chalk up $2.50 for every ATM withdrawal.

Trying to even determine what the best plan with a RushCard probably isn’t worth it. Just look elsewhere for a better offer.

Worst Retail Credit Card

Kroger 1-2-3 Rewards

When you’re shopping with a store credit card, you’d assume you’re going to get better-than-average returns, especially with in-store purchases, right? Not so with the Kroger 1-2-3 Rewards card.

Although you’ll earn 1 point for out of store purchases, this works out to only 0.5% due to their deceptive reward systems. Even in-store benefits equate to only 1% back, which is standard for just about any rewards card. Some rewards cards even offer 3-6% cash back on grocery at any store (not just Kroger) in addition to 1% on all other purchases.

Even if you’re a loyal Kroger shopper, this card makes you wonder: why limit yourself and settle for less?

Hopefully this list didn’t get you too down on credit cards. There’s still plenty of great credit cards out there, you just need to do the research to find them.

 

References and additional resources:

http://creditcardforum.com/visa-mastercard/908-kroger-credit-card-read-before-you-apply.html

http://money.msn.com/saving-money-tips/post.aspx?post=70a8e321-63fc-4846-9a5b-74455e442f45

http://money.cnn.com/2011/02/07/pf/credit_card_interest_rate/index.htm

http://credit.about.com/od/creditcardreviews/fr/applied-bank-secured-visa-review.htm

www.dailyfinance.com/2012/01/10/5-worst-credit-cards-of-2011-cardratings-plastic-hall-of-shame/

http://credit.about.com/od/creditcardreviews/fr/discover-motiva-credit-card-review.htm

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