Nothing can be scarier, when it comes to financial well-being, than the wrong credit card.Â When you consider that the average American household that carries debt struggles with credit card balances of $16,140,Â you understand that the last thing consumers need are cards that make their debt struggles even harder by hiding tricks and fees in the fine print.
In the spirit of Halloween, CardHub compared more than 1,000 credit cards in order to identify the scariest offers on the market. BlackEnterprise.com caught up with CardHub Analyst Jill Gonzalez to get her insights on the best and worst cards of 2015.
BlackEnterprise.com: How would you define a ‘scary’ credit card?
Gonzalez: A ‘scary’ credit card can be defined by high interest rates, high balance fees and the lack of transparency, to simply choosing the wrong card for your needs.
What are the most common mistakes consumers make when evaluating a credit card?
We found that the most common mistake consumers make is choosing the wrong type of credit card. Consumers tend to go for rewards credit cards, but those are not going to benefit someone who has credit card debt. Many will also pick credit cards with 0% balance transfer APRs and forget about the fees; balance transfer fees, that come along with them.
What are the most important things people should consider when evaluating a credit card?
Consumers should be aware of their needs and spending habits before choosing which credit card to apply for. They should also know their credit score and their chances of actually being approved for that card. Applying carelessly for a handful of cards will result in a lot of hard inquiries on your credit at once, and in turn damage your credit score.
Are there cards that people should consider when they’re balancing other debt, particularly student loan debt?
Balance transfer introductory APR rates are now the lowest they’ve been in recent memory, for some of the longest periods of time. The Chase Slate Card, for instance, has 0% on balance transfers for 15 months and no balance transfer fee. That combo makes students loans a little less terrifying.
What are the scariest cards out there now?
If you’re working on rebuilding your credit score, thenÂ First PREMIERÂ® Bank Gold Credit Card is the scariest, due to its $95 processing fee prior to account opening, $75 annual fee during the first year, $120 in annualized membership fees in each subsequent year, a 25% fee for any credit limit increase, and an astonishingly high 36% interest rate.Â If you are on the hunt for rewards stay clear from the UBS Preferred Visa Signature Credit Card because it has a $495 annual fee in return for a $113 initial bonus and 1-3 points per $1 spent, and if, like so many other consumers, you are focused on balance transfers, the Royals Credit Card is last on the list with 3.99% introductory balance transfer APR for 6 months, 5% balance transfer fee, and 14.24% to 20.24% regular APR.
What are the best cards available?
For excellent credit, the CitiÂ® Diamond PreferredÂ® Card is the best credit card out there, offering the longest 0% introductory term on the credit card market, at 21 months. For consumers with good credit we picked Capital OneÂ® QuicksilverÂ® Cash Rewards Credit Card because of its 1.5% cash back across all purchases. [It] offers great value and simplicity.Â BarclaycardÂ® Rewards MasterCardÂ® is a great option offering exactly what most people with fair credit are looking for: no annual fee (which enables free credit building) and a bit of rewards (which help subsidize spending as long as you pay your bill in full every month).Â Consumers who are looking to improve their limited credit should chose Capital OneÂ® Platinum Credit Card, given that it does not charge an annual fee and can serve as a viable low-cost credit building tool.Â The Capital One Secured MasterCard does not charge an annual fee, and the fact that it can be a partially-secured card makes it quite an attractive option for many consumers.