Bad plastic: The worst credit cards of 2011

The economy seems to be making a very slow march toward recovery. But we are far from out of the woods, and consumers still need to make the best financial choices, particularly when it comes to credit. CardRatings.com, a credit card comparison site, has issued its list of instruments to avoid: the worst credit cards of 2011.

First Premier Gold

This card, according to CardRatings.com, had the highest interest rate of 2011. The partially secured card has a fixed APR of 49.9 percent. The card requires an initial deposit of $95 and charges a $75 first-year fee. It also comes with $6.50 monthly service charges.

Applied Bank Platinum Zero

This one earned its place on the list for its deceptive advertising. Secured credit cards are used to rebuild credit following bankruptcy, foreclosure and other financial disasters. What consumer in that position, eager to rebuild financial trust, would not be thrilled to find a secured card that promises no interest on purchases, ever? But you know what they say about things that are too good to be true. Upon closer inspection, the card carries so may hidden fees that consumers end up paying nearly $120 a year. According to CardRatings.com, that is the equivalent of 24 percent APR if the card carries a $500 balance.

[Avoid credit card debt with online loans]

Applied Bank Gold Visa

No surprise, this secured card comes from the same Delaware startup bank as the Platinum Zero above. CardRatings.com calls this the worst secured card of the year because it eliminates the grace period on purchases. The interest begins to pile up as soon as a a transaction is made.

Visa Black Card

CardRating.com calls this a “weird, cheap knockoff” of the American Express Centurion Card, which it is designed to resemble. The AmEx Centurion, with its annual $5,000 fee, gets the attention of merchants and comes with grandiose perks. The Barclaycard’s Visa Black Card, while only charging $500 annually, comes with perks equivalent to much cheaper cards. CardRatings.com recommends the Chase Sapphire Preferred or PenFed Premium Travel Rewards American Express Card as lower-cost comparable instruments.

World of Warcraft Visa

At first a toss up with Merrick Bank’s Hooters MasterCard, CardRatings.com finally decided on the WoW card as the year’s most embarrassing plastic rectangle. The WoW card offers points that can be redeemed for a month of online gameplay. But prepaid game cards can be purchased for $10 a month. Therefore, according to CardRating’s.com, cardholders are “earning about 0.67 percent in cash value.”

J.C. Penney Retail Credit Card

A separate survey from CreditCardForum called this the sixth worst credit card in the nation. The APR on the card at this time is, according to CreditCardForum, “a staggering 26.99 percent.”

CardRatings.com, however, calls it the card with the “most unfair reputation.” It soars above other retailer credit cards because of its perks. An attentive shopper can take advantage of frequent discounts — some up to 30 percent off — and save hundreds a year. But, the comparison site warns, the card’s balance must be paid every month to avoid hefty interest.

Even CreditCardForum conceded that because the J.C. Penney card has no fees, it could be a good one to use for rebuilding bad credit.

Sources

Daily Finance
Credit card Forum
Fox Business