7 Credit Card Offers That Probably Aren’t Worth It
In the market for a new credit card? Here are the card offers to avoid—and the ones to consider instead.
What to look for in a credit card
The best credit cards offer lucrative rewards programs, concierge services, and other extra perks, but those incentives are far from common. The main thing you should look for in a credit card is low costs, according to Jill Gonzalez, an analyst at WalletHub. “This includes the interest rate, the annual fee, and other fees that the card may incur, such as late fees and foreign transaction fees,” Gonzalez says. There are thousands of credit cards on the market, and some of them are downright awful. If you’re looking for a new credit card, it’s important to do your research to make sure you get the right one. To help you save time, here are eight credit cards that you should try to avoid altogether.
Bad offer for cashback: Goodyear® Credit Card
The cards you should avoid are the ones that offer no rewards, like the Goodyear credit card, Gonzales says. “This card only has minor promotions, like $5 off on oil changes,” she says. Instead, consider the Chase Freedom Unlimited Card, which offers 2 percent cash back and has no annual fee. A few other cards worth mentioning that offer good cashback rewards include the Capital One Quicksilver or the American Express Blue Cash Preferred, per Gonzalez. Use these cards, and get the most for your money, to buy these things you should always pay for with a credit card.
Bad offer for travel rewards: Mastercard® Gold Card
The annual fee for the Mastercard Gold Card is a whopping $995, and the rewards rate is just one point per dollar you spend, Gonzalez says. If you’re on the market for a new credit card and want the most travel rewards, Gonzalez recommends the Capital One Venture Rewards credit card. “The rewards rate is two miles for each dollar you spend, and there is a bonus of 50,000 miles, provided you spend $3,000 in the first three months,” Gonzalez says. Use the right credit card at the right time to upgrade every aspect of your next trip with these 10 credit card perks you should always use on vacation.
Bad offer for gas: Chain-specific cards
If you spend a lot at the pump, getting a gas credit card might sound like a good idea. That’s not the case, according to Gonzales. “There are plenty of gas rewards cards to choose from,” Gonzalez says. “Those that aren’t always such a great deal are the cards that are affiliated with a particular gas station chain, and only give you bonus gas rewards when you fill up there.” If you’re not married to a favorite gas station, it makes more sense to opt for a card that gives gas reward points no matter where you fill-up. The Citi Premier card offers three points per each dollar you spend at all gas stations—about three times more than the average rewards card would give you. “The card also has 60,000 points initial bonus for spending $4,000 within three months of opening the account,” Gonzalez says.
Bad offer for balance transfers: China Airlines® Credit Card
Avoid credit cards with a short 0 percent intro APR period. One card that’s lackluster in this category is the China Airlines credit card, according to Gonzalez. It’s not only an expensive card, charging a 5 percent balance transfer fee, but it also only offers 0 percent intro APR for six months before it goes up to 20.24 percent. “A better option for transferring your balance would be the Amex EveryDay credit card with a 0 percent transfer intro APR that lasts for 15 months, and no transfer fee,” Gonzalez says. No matter the card you have, never use credit to pay for these 10 purchases.
Bad offer for rebuilding credit: First Premier Bank Gold® Credit Card
The First Premier Bank Gold credit card has a 36 percent interest rate, and it charges a $95 processing fee before opening an account. On top of that, the annual fee ranges from $75 to $125 in the first year, depending on your credit limit, Gonzalez says. After that, you pay a yearly fee of $45 to $49, a monthly fee of $6.25 to $10.40, and a 25 percent fee for any credit limit increase. If you’re trying to rebuild your credit, Gonzalez suggests opening a secured card with no annual fees. “The important thing is to use it responsibly, and always pay your bill in full, to make sure your credit will improve,” Gonzalez says.
Bad offer for store credit: Big Lots® Credit Card
Almost every major retailer offers its own credit card, but some are worse than others. The Big Lots Credit Card is just one example. It offers no rewards program and no details on its special member offers. Its value is supposed to be promotional financing on purchases of $250 or more, but there’s a catch. Instead of offering a traditional 0 percent intro APR, it’s a deferred-interest plan.
If you don’t pay off the purchase in full before the promotion ends, you’ll owe interest—an expensive 29.99 percent variable APR—on the original purchase amount rather than the remaining balance. “Deferred interest means if you spend $500 and come up a dollar short, you’ll pay interest on the entire $500,” warns Zaino, president of TZG Financial. “That doesn’t seem fair, but that’s one way they get you!”
Bad offer for students: State Farm® Student Visa®
A handful of student credit cards offer decent rewards, but this one doesn’t belong on that list. You’ll earn 3 points per dollar spent on State Farm insurance premiums up to $4,000 annually, and 1 point for every $2 you spend elsewhere. As a college student, you’re not likely spending much on insurance products, if at all. Also, the base rewards rate is subpar, and there are no details about how much the points are worth. Instead, consider the Journey® Student Rewards from Capital One®, which offers up to a clear 1.25 percent cash back on every purchase you make if you pay on time. If you haven’t had a credit card yet, you’ll be quick to apply once you read about these 15 credit card perks you probably didn’t know exist.