This year, credit experts at CardHub.com have analysed more than 1,000 credit card offers to come up with the scariest offers on the market today.From sky-high introductory fees and interest rates well above the national average, these are the cards they say are practically tailor-made to trip up consumers.
Here are seven of the worst, along with commentary from Card Hub CEO Odysseas Papadimitriou:
Worst General-Consumer Credit Card for Rewards
- Visa Black Card – The bad: A $495 annual fee only buys you 1 point per $1 spent, airport lounge access, and the “vague promise” of luxury gifts.
Odysseas Papadimitriou (OP): “It’s obvious that the Visa Black Card’s pricing is one of the ways that Barclaycard US is trying to fool consumers into thinking they’re getting the Black Card they see their favourite musicians and actors flaunting. They want you to think. ‘If it’s that expensive, it must be the real deal.’ However, the Centurion Card is rumoured to have a $5,000 initial fee and a $2,500 annual fee. Besides, its secrecy is part of its lore, so the fact that you can even apply for the Visa Black Card online or see commercials for it on TV should tip you off that it’s not the real deal.
Worst General-Consumer Credit Card for Big-Ticket New Purchases
- Arvest Bank Classic Credit Card – The bad: A 4.9% introductory interest rate on new purchases for 6 months and a 17.9% regular APR.
(OP): “There are simply too many credit cards out there offering 0% introductory APRs for well over a year to even consider a card whose intro rate is nearly 5% and lasts for only six months. In fact, the average 0% credit card offers that rate for over 10 months. This card’s inferiority is best illustrated when you compare it to the likes of the Citi Diamond Preferred and Citi Simplicity cards, both of which offer 0% on new purchases for 18 months.”
Worst General-Consumer Credit Card for Balance Transfers
- UBS Preferred Visa Signature Credit Card – The bad: A 9.99% introductory balance transfer APR for 6 months; a 3% balance transfer fee; and a $495 annual fee.
(OP): “Avoiding interest and fees for a significant period of time is one of the fastest ways for people to pay down debt. The multitude of 0% balance transfer offers currently on the market is therefore extremely beneficial to indebted consumers. In this environment, a card like the UBS Preferred Visa Signature Card should not even be positioning itself as a balance transfer credit card if it is going to offer such unattractive terms.”
Worst Credit Card for Rebuilding Bad Credit
- First Premier Bank Gold Credit Card – The bad: A staggering 36% interest rate; $95.00 processing fee prior to account opening; $75.00 annual fee during the first year; $45 annual fee in each subsequent year, a $6.25 monthly fee beginning in the second year; and a 25% fee for any credit limit increase.
(OP): “When you’re building credit, you want a card with the lowest possible fee structure. And under no circumstances should you waste $170 in fees when you can take $30 more and place a $200 fully refundable security deposit for a secured credit card with a $29 annual fee.
Worst Credit Card for Students
- U.S. Bank College Visa Credit Card – The bad: No rewards points or low introductory rates for students; a regular APR as high as 20.99%
(OP): “Students are in a unique position to get more attractive credit cards than they deserve based on their credit standing since banks value their high earning potential and the years of financial independence they have ahead of them. By applying for the U.S. Bank College Visa Credit Card, they would therefore be throwing away a lot of value.”
Worst Small Business Credit Card for Rewards
- U.S. Bank FlexPerks Select Rewards Visa Business Credit Card – The bad: Just 0.5 points per $1 spent and a 5,000 point initial bonus (a $50 value)
(OP): “Not only does the U.S. Bank FlexPerks Select Rewards Business Credit Card offer well-below-average rewards, but it also provides them in the form of points, making them even worse. An issuer can devalue the points you’ve earned simply by increasing the number you need for redemption, and that’s why I tend to recommend cash back rewards when all else is equal.”
Worst Credit Card for Small Business Funding
- Most Small Business Credit Cards – Why: The Credit CARD Act of 2009 doesn’t apply to business credit cards, which means they means they’re free to jack up interest rates for existing balances unless a cardholder is at least 60 days delinquent.
(OP): “Certain issuers, namely Bank of America, have proactively applied all CARD Act protections to their business credit cards, which makes them at least suitable for funding. However, since there are far more applicable general-consumer credit cards and using one won’t increase a small business owner’s personal liability, you can get far better terms by using a 0% general-consumer card for funding and a rewards business credit card for everyday expenses that you pay for in full within each month.”
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