I was recently searching the mail and saw a stack of credit card applications. From television commercials to internet advertisements, we are bombarded with advertisements on credit cards. Credit card companies pitch products to people whose credit varies from excellent to poor. People with ratings that fall in the reasonable to poor range are often attacked by “fee harvesters”. Fee harvesters are companies that offer low-credit, high-cost cards. Signing up for a credit card with high interest and exorbitant costs is like having an albatross around your neck. It is better not to have a credit card than to be stuck on a high-cost card. With such cards it makes sense that more Americans say no to credit cards.
Worst unsecured card
The First Prime Bank PL Gold Card is a credit card that has recently attracted a lot of media attention because of its astronomical interest of 79.9%. I find it ridiculous that a credit card with an interest rate of nearly 80% is legal in the United States. The initial credit limit for the Premier card is $ 250. Once you activate your card, First Prime Bank PL will gladly pay you the following fees:
- $ 95.00 Program setup table
- $ 48.00 annual fee
- $ 29.00 service charge
- $ 84.00 annual maintenance fee ($ 7.00 monthly fee)
After taking into account all these costs, your available credit is only $ 71. If you add monthly service costs over a whole year, your account will be $ 6 overwritten before you ever charged anything! This is the worst credit card I have ever seen. This card has costs for everything from credit limit increases to invoice payments.
Worst secure card
New Primeholding Bank MM tries to give First Prime Bank PL a run for its money with their secure credit card. Customers pay a 19.5% interest rate for the privilege of transporting a New Millenium Mastercard. Did I mention that the 19.5% interest rate is the minimum APR available? This is the highest interest rate I have ever seen charged on a secure credit card.
- $ 99.95 Account activation fee
- $ 10.00 “Rush” Handling fee
- $ 59.00 annual fee
The new Millenium card has no grace period, making it almost impossible to pay for this card because you start to generate interest from the moment you make a purchase. New Millenium also offers a prepaid card with activation fees of $ 99.00 and a monthly entry fee of $ 5.95. That is a total of more than $ 170 in fees alone.
Worst Prepaid card
According to The New York Times, “prepaid debit cards are among the fastest growing products in the consumer banking sector, but often their convenience comes with hidden costs.” The Prepaid Visa CrashCard is an example of this type of card. The CrashCard offers 2 basic plans. The Pay-As-You-Go subscription has a hefty activation fee of $ 19, 95 and all signature and PIN transactions cost $ 1 per transaction. Withdrawals are $ 1.95 each. The other option is to become a monthly member with the following costs:
- $ 9, 95 Maintenance costs monthly bills
- $ 3.00 Activation card
- $ 1.00 Bill Payments
- $ 1.00 fee for paper statements
So, which lesson can you take from these examples? If you are going to carry a credit card, stay away from those three cards. Always remember the three basic rules when searching for a credit card:
- Look for a card with a large trusted financial institution. This makes it easier to contact your financial institution if you encounter problems.
- Avoid cards with high interest rates and no grace periods. A high interest rate can cost you thousands of extra dollars.
- Beware of hidden costs (activation costs, annual costs, processing costs). High fee cards make it far too easy to exceed your credit limit.