Let’s be honest… credit card companies don’t exactly have saintlike reputations. But which ones are the worst? Who charges the most ridiculous rates and fees? Who has the worst customer service? Well, here is CreditCardForum’s list of the 10 worst credit cards of the year.
Note: In case you are wondering why there are no pictures of these credit cards, that’s because if there were, the card issuers would most likely demand the images be removed on the grounds of copyright – they hate being on this worst credit cards list!
#1 Worst: First Premier Bank Platinum MasterCard
Platinum… it usually means the card is at least half-way decent, right? Or perhaps even prestigious like the AmEx Platinum? Well unfortunately, this First Premier Platinum is neither.
First Premier also issues the Aventium, so I guess it comes as no surprise that their Platinum MasterCard is structured in a similar – and ridiculous – manner:
- First year annual fee 0f $175.00
- Second year is a $49.00 annual fee, but that’s when a $14.50 monthly servicing fee starts too, so the total you are shelling out for the 2nd year and beyond is 12 x $14.50 ($174) + $49 = $223.
- The interest rate is a tad lower, yet still outrageous at 36%
Conclusion? This is a fee harvester credit card on steroids!
#2 Worst: Aventium Classic Credit Card
This card barely squeaks past the law to be legal – the CARD Act says that fees during the first year cannot exceed more than 25% of a card’s credit limit. So what does the Aventium do? Jack them up during year two, of course!
- First year’s annual fee is $75.00
- Second year’s annual fees may seem lower since it’s $45.00 but don’t be fooled… beginning on year two there is a $6.50 “monthly servicing fee” which means when combined, you’re paying $123 annually.
- The APR is a bargain at 49.9%
To learn more about this amazing credit card deal, check out my review of the Aventium credit card.
#3 Worst: Centennial Classic Credit Card
So if the First Premier MasterCard isn’t your cup of tea, perhaps you would like a glamorous Gold card? Well, let’s just say the Centennial Gold is a far cry from the AmEx Gold Card!
I see CreditCards.com is advertising it under their “bad credit” category and one of the card’s bullet points is “Join nearly 3 million credit cardholders.” That’s pretty scary to think that nearly 1% of the U.S. population is a cardholder (assuming they’re referencing American cardholders) because this is one of the worst credit cards to have, ever!
- There’s a one time “processing fee” of $95.00 to open the account.
- To add insult to injury, you will also have a $75.00 annual fee for the first year. For the second, it’s a similar setup as above; $45 annual fee + $6.25 monthly servicing fee (so $120 between the two).
- The APR? Also 36%.
In case you haven’t guessed by now, this is another First Premier Bank credit card offer. In fact, I could round out the majority of this list with First Premier cards (yeah, there’s more) but to change things up, I need to enforce a “3 strikes and you’re out rule” so this doesn’t just turn into a list of all First Premier. So let’s look elsewhere for numbers 4 thru 10.
#4 Worst: Midas Credit Card
For years – even during 2008, 2009, and 2010 when the economy was worse – the highest APR that I recall seeing on a store credit card was 26.99%. Despite the fact that the prime rate hasn’t gone up since then, GE Money Bank decided to take it to a whole new level in 2011 by offering 29.99% on many of the store-branded cards in their portfolio, including this one.
With some many charging 29.99% it was hard to pick the absolute worst of the bunch, but I decided Midas should take that honor. Why? Because let’s face it… if you’re at Midas, you’re probably between a rock and a hard place… dealing with expensive car problems.
It’s one thing to charge someone almost 30% on clothes they don’t need, but is it really necessary to hit ’em when they’re down by charging 30% on what likely may be emergency car repairs?!
#5 Worst: Office Depot Personal Credit Card
There are 3 cards offered by Office Depot – 1 personal and 2 business versions – and the personal card is by far the worst out of the bunch with a 27.99% standard APR (4% higher than the business version).
Aside from the high interest rates, the card doesn’t offer much. You get no additional rewards for having the card – the Office Depot rewards program is completely separate from their credit card.
Now this card does offer no interest for 180 days on purchases of $299 or more, but it’s deferred interest. That means if you don’t pay off every penny of that purchase before the 180 days are up, you will be walloped with interest going back to day one. Being that their APRs are so atrocious, it’s a risky proposition unless you can without a doubt pay it off in time (but who can say that in this economy?).
The personal version should be avoided unless it’s being used to rebuild credit. The same applies to their business cards. You can get up to 5% cash back on office supplies using some of these business credit cards.
#6 Worst: JCPenney Credit Card
It should come as no surprise that department stores offer some of the worst credit cards to have. APRs in the 20’s and lackluster rewards are the norm… and that is exactly what this card will give you.
As of January 2012 the standard APR on the application was a staggering 26.99%. This is a notch worse than the 20% to 25% seen right now on the majority of store credit cards.
But even if you don’t carry a balance, it probably isn’t worth getting this card for the rewards. For starters, it can only be used at JCPenney. But what really sucks about it is that having the credit card doesn’t give you much of a boost in how much is earn for your spending. On regular purchases, the JCP Loyalty Rewards program without their credit card gives 1 point per dollar and WITH their credit card it’s only 1.25 points per dollar… not much of an extra incentive to get the card, is it?
On the bright side, there are no fees associated with this card. Make no mistake about it – this is one of the most horrible cards – however if you have bad credit and need something easy to qualify for to rebuild, then it might not be a bad idea.
#7 Worst: Radio Shack Credit Card
The application page for this card says “Reward Yourself” in big, bold letters. But after seeing what it has to offer, it sounds more like punishing yourself.
For starters, the variable APR is one tier only at 28.99% (even higher than the previous 26.99-28.99% two tier offer). The advertised promotion touting “no interest if paid in full within 6 months” uses deferred interest… if you don’t pay it before then, you will be hit with the finance charges retroactively.
The card doesn’t offer a rewards program, but it does give a 15% discount on in-stock batteries. But is that even worth it, when you consider how expensive Radio Shack can be?
#8 Worst: GE Care Credit
The only reason I don’t have this one higher on the list is that it’s been out for years and by now, hopefully most people already know what a bad deal it is.
In short, it offers deferred financing along with ridiculous interest rates. But the worst part is not the card’s issuer, GE Money, but rather some of the unscrupulous doctors and dentists who peddle it. I personally have been lied to by doctors about how this card’s deferred financing really works. My review of the GE Care card will fill you in.
#9 Worst: Walmart Credit Card
This one boggles my mind, I can’t figure out why anyone would apply. This Walmart credit card review I wrote summarizes why I dislike it, but here’s a little recap:
- The store-only version doesn’t offer cash back
- The Discover version (which by the way only operates as the card’s payment network, so don’t expect customer service from Discover) does give cash back but it’s dismal. You get 0.25% on total purchases up to $1,500, 0.50% on total purchases from $1,500.01 to $3,000 and 1% on total purchases over $3,000. The gas rebate at Walmart stations is a joke, when you consider that 5 cents off per gallon = 1.25% with $4 gas.
#10 Worst: Valero Gas Card
There are a lot of bad gas cards on the market and when it comes to rewards, Valero might is among the most dreadful.
The basic version for consumers gives no rewards, while the “Preferred Gold Card” will cost you $10/year and gives a measly gas rebate as follows:
- $0.01/gallon for Diesel
- $0.01/gallon for Regular Unleaded Gasoline
- $0.015/gallon for Mid-Grade Unleaded Gasoline
- $0.02/gallon for Super Unleaded Gasoline
These low rewards, along with the high interest rates, leave little reason to apply for a Valero credit card.
With so many viable contenders for the worst credit cards in America, it’s not easy to pick out just the top 10 (err… I mean bottom 10). Share your thoughts and vote for which credit cards you think should make the cut for 2013. Consumer reviews on Credit Card Forum will be used to come up with next year’s list!
This list was last updated July 2012