11 Types Of Credit Cards To Avoid
We love credit cards because they allow us to buy things when we don’t have the money. In fact, nearly seven out of ten adult Americans use a credit card for most of their purchases, according to the National Foundation for Credit Counseling’s 2011 Financial Literacy Survey.
We hate credit cards because the banks that issue them usually charge a lot of interest to use them, and some say these companies take advantage of people who can’t control their spending. That’s a debate for another day.
The fact is that not all credit cards are the same, and some are worse than others. This list of 10 credit cards to avoid comes from the experts at CreditCardForum, cardratings.com, indexcreditcards.com and cardhub.com.
Aventium Classic Credit Card
This card is issued by First Premier, a bank that issues cards that target consumers who have below-average credit, tops most lists because it charges a first-year annual fee of $75, and the second-year annual fee and monthly servicing fee totals $123. The card’s annual percentage rate is 49.9 percent. In case you’re wondering, that was not a misprint. 49.9 percent is 35 percent above the national average and 26.5 percent above the average for people with bad credit, but it is 30 percent less than a card First Premier issued in 2009.
First Premier Bank Platinum MasterCard
First Premier charges a first-year annual fee of $175 and a second-year annual fee and monthly servicing fee of $223. But First Premier is being kind to the users of this card: They’re charged an APR of only 36 percent. What a gift!
Centennial Classic Credit Card
This card – also issued by First Premier -- charges a one-time processing fee of $95 to open a credit card account, a first-year annual fee of $75 and a second-year annual fee and monthly service fee that totals $120. Like the First Premier Bank Platinum MasterCard, the APR is only 36 percent.
Office Depot Personal Credit Card
This is the worst of the three cards offered by Office Depot because of the APR of 27.99 percent – 4 percent higher than the two other cards. The personal card offers no rewards, including for Office Depot products. It offers no interest for 180 days on purchases of $299 or more, but it is deferred interest, so if you don’t repay the balance within 180 days, you’ll have to pay interest that goes back to day one.
Radio Shack Credit Card
The APR is 29.99 percent, and it has the same conditional deferred interest deal as Office Depot. The card offers no rewards program, except for a 15 percent discount on batteries, which tend to cost more at Radio Shack than at most other stores.
Wal-Mart Credit Card
The store-only version of this card offers no cash back, and the Discover version offers a dismal 0.25 percent cash back on purchases of as much as $1,500, so if you use the card to buy $1,500 worth of items, you get back $3.75. The gas rebate is not much better; at 5 cents per gallon, you get $1 if you pump 20 gallons of gas. At $4 per gallon, that comes to a $1 discount on an $80 purchase.
Valero Gas Card
The basic version of the card offers no rewards; the “Preferred Gold Card” costs $10 a year and offers a measly discount of only one penny a gallon for diesel and regular unleaded gasoline.
Applied Bank Platinum Zero
This card gets the award for most deceptive marketing. It promises no interest on purchases -- for life. The truth is service charges on this account can cost nearly $120 per year. If you have a balance of $500, that's just like paying an annual percentage rate of 24 percent.
Visa Black Card
This card charges a $495 annual fee and 14.99 percent APR. Unlike other expensive cards, users don’t get exceptional benefits or offers for having it in their wallets. It offers only 1 percent cash back on all purchases and airport lounge access.
Wells Fargo Business Platinum Credit Card
This card fails to offer CARD Act protections against arbitrary interest rate increases. It also offers no rewards unless you pay a $50 annual fee, which is waived for the first year.
Midas Credit Card
Issued by GE Money Bank, charges an annual percentage rate of 29.99 percent.
Credit card offers change all the time, so the cards listed above may or may not be offered today or may have improved their offerings. If you apply for a credit card, do your homework and find out about its terms and conditions. If the fine print is too fine and you are ever stuck with a card like one on this list, pay off your balance as soon as you’re able and consider cancelling the card.