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The WORST Credit Cards May 12, 2011

Posted by CredZoo - Tame Your Credit in New Credit Information, Tips For Good Credit.
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 To identify the world’s worst credit cards, MSN Money writer Liz Pulliam Weston consulted with three of the countries top experts: Curtis Arnold of CardRatings.com, Justin McHenry of Index Credit Cards and Bill Hardekopf of LowCards.com

Their top nominations for the the WORST credit cards are….drumroll please….

  • Macy’s Card

Cards offered by retailers and specialty stores are usually a bad deal, but Macy’s still manages to stand out.

“Almost without fail, (retail) cards charge exorbitant interest rates. The worst offender I know of is the Macy’s credit card, with its 23.99% interest rate,” McHenry said, “but cards from J.C. Penney, American Eagle Outfitters, Gap, Brooks Brothers, J. Crew and Dillard’s all come in at rates over 20%.”

Many people apply for retail cards to get a discount on their purchases, typically 10% to 20% off. But you can often get the same benefits and a better overall deal by applying for a store card that’s affiliated with a major credit card brand.

“If you really want a store credit card, try to get a store card associated with Visa, MasterCard or American Express — those cards generally have interest rates lower than the store-only credit cards,” McHenry said. “For example, I just got a Banana Republic Visa with an interest rate of 14.24%. Compare that to Banana Republic’s store-only card, which charges a rate of 21.9%.”

  • Money Return Platinum Plus Visa from Bank of America

If you pay your balance in full, cards that offer cash rebates are usually a terrific deal… Not this one.

Oh, the terms look sweet at first: no annual fee, 0% for six months on balance transfers and a whopping 10% cash rebate.

You get the 10% cash back, however, only if you carry a balance. And the annual percentage rate for carrying a balance ranges from 9.99% to 19.99%.

“So you pay up to almost a 20% APR to earn (back) only 10% of your interest that you pay out of your pocket,” said Arnold, of CardRatings.com. “Doesn’t take a math genius to figure out that this is a lose-lose proposition.”

You can read more of Liz’s findings on her money basics blog, here!

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