This will put a scare in you: credit cards with a 36 percent interest rate. BOO!
Just in time for Halloween, personal finance website cardhub.com released its annual list of the year's worst credit cards. CardHub analyzed more than 1,000 cards in seven categories and named the priciest, least convenient option in each group-one of which, the First Premier Bank Gold card, has that massive 36 percent interest rate. For comparison, the average interest rate is about 13 to 15 percent, according to recent Bankrate numbers.
"Picking the wrong credit card is tantamount to skipping the house that gives out King Size candy bars on All Hallows' Eve," according to the CardHub report. That is to say, there are good options out there for people seeking credit-so there's no excuse for using a bad card, CardHub spokeswoman Jill Gonzalez said.
"Credit cards are so competitive for people with good credit," she said. "Rewards are really great now, especially with a cash-back option, so for a card to offer no rewards [is worse in comparison]."
And the right credit card is only going to be more important if national trends continue: By the end of the year, according to CardHub, Americans will have about $55 billion more in credit card debt than they did at the beginning of 2014.
In general, Gonzalez recommends reading the fine print before making a credit decision-that low-interest rate might not last as long as you'd like, for example. And if your credit card use is irresponsible, it won't really matter how great the card itself is.
"People who are looking to get a credit card and then treating it like a debit card, getting cash withdrawals, cash advances, those cards-regardless of the card you get-are going to drag on those interest rates," she said.
Several cards have appeared on CardHub's worst list more than once.The First Premier Bank Gold card and the Visa Black card each made their fourth appearances on the list this year, and the card named worst for college students-the U.S. Bank College Visa card-made the list for the third time.
Here is the complete list:
- Worst Rewards Card: Visa Black card Worst Card for Big-Ticket Purchases: Toyota credit card
- Worst Balance Transfer Card: UBS Preferred Visa Signature credit card
- Worst Card for Rebuilding Bad Credit: First Premier Bank Gold credit card
- Worst Card for Students: U.S. Bank College Visa credit card
- Worst for Small Business Rewards Card: CorTrust Bank Visa Business credit card
- Worst Card for Small Business Funding: most small business credit cards - since small-business credit cards are not subject to the same consumer protection regulation as other cards, CardHub has judged the majority of them to be less than optimal.
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