Credit Cards

Worst Credit Cards: Cards to Avoid


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As much as we believe that good credit habits and the right credit card can be a great way to save money and improve your financial health, some credit cards just aren’t up to the task.

They may have unusually high or unnecessary fees, few worthwhile benefits, or limitations that keep you from getting much value for your spending. We wouldn’t recommend these cards, but it’s helpful to recognize them and understand why they’re not good, so you know what to look for in your next card choice.

Here are some ways to make sure you’re choosing a good credit card option, the cards we consider to be among the worst available today, and better alternatives to consider instead:

What makes a bad credit card

Credit cards are designed for different purposes, from building credit to consolidating existing debt to maximizing rewards. So a “bad” credit card for frequent travelers looking to get great travel perks can be a great option for new cardholders looking to build credit.

Still, there are some warning signs of a bad credit card that remain true regardless of the type of card. Before you apply, look for these red flags in the card terms or details:

Credit card red flags to avoid

First of all, beware of high fees. Cards with annual fees can be worth it, especially premium travel cards or other rewards cards with enough benefits to recoup the price. And it’s typical to find fees for things like late or returned payments, cash advances, or balance transfers. But some credit cards, especially those designed to build credit, can add very high fees that only cost you in the long run, like monthly maintenance fees, activation fees, or membership fees.

Another red flag is very high interest rates. Credit cards generally charge high APRs compared to other financial products. The current average credit card APR is around 16%, according to the Federal Reserve. That’s why it’s important to only charge what you can afford and pay your balance in full each month. However, extenuating circumstances or an emergency may sometimes make it necessary to carry a balance. Make sure you understand exactly the APR that will be assigned to you and how interest accrues on your card before you open an account.

Finally, you’ll want to make sure your card helps you build credit. Always make sure the issuer reports your payments to all three credit bureaus on a regular basis. If it’s a credit-building card, look for options to upgrade to another card once your credit score has improved, for example, the option to have your security deposit returned on a secured card, or to upgrade from a student card to general. card option

Credit cards to avoid and alternatives to consider instead

First Premier Premier Bankcard Mastercard Credit Card

The biggest issue we have with First Premier Bank’s Premier Bankcard is its extensive fee schedule. To get started, you’ll incur an annual fee ranging from $75 to $125 the first year, then $45 to $49 thereafter, and a monthly fee of $6.25 to $10.40. Other fees include a one-time program fee of up to $95, a fee when you’re approved for a credit line increase (after automatic account reviews), and an astronomical 36% APR for all cardholders. All told, you could pay nearly $200 or more each year just to have this card, which also doesn’t offer any rewards.

The main benefit of the Premier Bankcard is that it is an unsecured option for building credit. However, there are many better unsecured cards for bad or no credit, including the Petal 1 Visa Credit Card and the Capital One Platinum Card, both of which have no ongoing annual or monthly fees.

  • Introductory Offer:

    N/A

  • Annual quota:

    See issuer website

  • ordinary APR:

    See issuer website

  • Recommended credit:

    (No Credit History)

  • More informationexternal link icon On our partner’s secure site
  • Introductory Offer:

    N/A

  • Annual quota:

    $0

  • ordinary APR:

    20.24%-29.74% (Variable)

  • Recommended credit:

    (No Credit History)

  • Apply Nowexterna link icon On Petal’s secure site
  • Introductory Offer:

    N/A

  • Annual quota:

    $0

  • ordinary APR:

    26.99% (changeable)

  • Recommended credit:

    (No Credit History)

  • More informationexternal link icon On our partner’s secure site

Surge Credit Card Mastercard

Like the First Premier card, the Surge Mastercard is also bogged down by its expensive fees. It has an annual fee of between $75 and $99 the first year, then $99 every year thereafter. There is also a monthly maintenance fee of $10 starting with the first 12 months and a variable APR between 24.99% and 29.99%.

Instead of paying these fees, another affordable option for people with bad credit is a secured credit card. You’ll pay a deposit up front, but it’s refundable: when you close your account or upgrade to an unsecured card option, you’ll receive your deposit in full. Some of our favorite secured cards for building credit include the OpenSky Secured Visa Credit Card and the Discover it Secured Card.

  • Introductory Offer:

    N/A

  • Annual quota:

    See Terms*

  • ordinary APR:

    See Terms*

  • Recommended credit:

    (No Credit History)

  • More informationexternal link icon On our partner’s secure site
  • Introductory Offer:

    N/A

  • Annual quota:

    $35

  • ordinary APR:

    17.39% (variable)

  • Recommended credit:

    (No Credit History)

  • More informationexternal link icon On our partner’s secure site
  • Introductory Offer:
  • Annual quota:

    $0

  • ordinary APR:

    23.24% Variable

  • Recommended credit:

    (No Credit History)

Fingerhut Credit Account

The Fingerhut Credit Account is a credit building option similar to a retail credit card. But it also has many hurdles for cardholders to jump and very limited benefits. You can use the account to make purchases with Fingerhut, an online retailer that sells a variety of items you can find at a big box store or on Amazon.com.

The drawbacks? The card has a very high APR of 29.99%, no other significant benefits, and its purchasing power is limited to a single retailer. As for Fingerhut itself, based on our research, you can find many items at lower prices elsewhere.

Instead of Fingerhut, consider other options for people with bad credit or no credit at all. There are many credit building cards that allow you to make purchases anywhere cards are accepted. For example, cards with alternative approvals, like the Petal 2 Visa Credit Card and the Tomo Card, determine creditworthiness using your savings and spending history, and you can earn cash rewards for your spending.

  • Introductory Offer:

    N/A

  • Annual quota:

    $0

  • ordinary APR:

    See issuer website

  • Recommended credit:

    (No Credit History)

  • More informationexternal link icon On our partner’s secure site
  • Introductory Offer:

    N/A

  • Annual quota:

    $0

  • ordinary APR:

    13.24%-27.24% (Variables)

  • Recommended credit:

    (No Credit History)

  • Apply Nowexterna link icon On Petal’s secure site

Black Mastercard

Unlike the other cards on our list, the Mastercard Black Card is not marketed as a credit building card. It is a luxury premium travel card with an annual fee of $495. However, for that price, you’re getting limited value.

Every dollar you spend earns you a point, which you can redeem for enhanced returns in certain categories: points are worth 2% for airline ticket redemptions and 1.5% of value for cash back redemptions. You’ll also get up to $100 in annual airline credits, Priority Pass Select airport lounge membership, a credit toward TSA PreCheck or Global Entry membership, and World Elite Mastercard benefits. But for the sky-high price, these benefits fall short.

For one, you can get the same rewards even with a card with no annual fee: Wells Fargo’s Active Cash Card, for example, earns 2% back on every purchase with no category limitations. And if you’re looking for premium travel options, both the Chase Sapphire Reserve and Platinum Card from American Express offer much stronger benefits, higher rewards rates and flexible redemption programs for frequent flyers.

  • Introductory Offer:

    N/A

  • Annual quota:

    $495 ($195 for each Authorized User added to the account)

  • ordinary APR:

    15.24% Variable

  • Recommended credit:

    670-850 (Good to Excellent)

  • More informationexternal link icon On our partner’s secure site
  • Introductory Offer:
  • Annual quota:

    $550

  • ordinary APR:

    16.99%-23.99% Variable

  • Recommended credit:

    740-850 (Excellent)

  • Apply Nowexternal link icon On Chase’s secure site

Editorial Independence

As with all of our credit card reviews, our analysis is not influenced by any association or advertising relationship.

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