Two years ago, we took a look at some of the worst credit cards in the world, giving us insight into how the uninitiated may view their credit as an obstacle instead of a tool towards frugal adventures. Since then, very little has changed: there are still a lot of bad credit cards out there that promise big rewards, but offer very little in exchange for an inflated interest rate and high fees.
After some consideration, I decided it was time to revisit this list once more and take a look at even more bad credit cards. Although I am a huge advocate for rebuilding credit through alternative products, these cards could do that at a high, counterintuitive price.
For those considering a new card, consider staying away from these three choices. It is my sole opinion these cards represent the worst offerings of 2017.
The NASCAR Credit Card
Once again, Credit One appears on our list with their latest offering for NASCAR fans. The NASCAR credit card from Credit One Bank offers a paltry one percent cash back on “eligible purchases,” but two percent cash back on purchases from the NASCAR.com Superstore.
What qualifies as an “eligible purchase” depends on the creditworthiness of the cardholder. Cash back categories could vary from gas and automotive purchases only, to a wide range of categories including groceries, mobile phone service and internet service. There are five different eligible purchase categories, all based on creditworthiness – not to mention the annual percentage rate and annual fees.
Even for those with the best credit, the NASCAR credit card can carry up to a 23.4 percent APR, adding on high interest charges to every purchase. For those rebuilding their credit, the APR can jump to 24.65 percent, with an annual fee of up to $99 on top.
Better choice: Considering the card is a simple cash back card with bonus categories, there are better options available to frugal travelers who want to start in the points and cash back game. For example, the Barclaycard CashForwad World MasterCard offers unlimited 1.5 percent cash back on all purchases, with a generous $200 cash back bonus after spending the first $1,000 on the card. In addition, cardholders get five percent back when they redeem their cash back!
The Best Buy Credit Card
What frugal traveler doesn’t enjoy technology? I have yet to board an aircraft where at least a quarter of the cabin wasn’t playing on some sort of gadget. Best Buy offers many of them for sale, with discounts through their My Best Buy rewards program.
The Citi My Best Buy Visa card offers account holders the opportunity to earn rewards towards the latest electronics through their spending habits. Effectively, cardholders can get a five percent refund for use at Best Buy on electronics at the big box retailer, redeeming 1,250 points for $25 in spending.
Alas, with great rewards often come great costs. The card comes with a whopping 25.99 percent APR for everyone, with limited bonus categories on earning rewards. Unless frugal travelers planning on traveling with every gadget under the sun, this card won’t get you closer to enjoying a trip.
Better Choice: For those who want to get closer to their next adventure, consider a card that balances a decent APR with flexible rewards. The Chase Sapphire Preferred and Barclaycard Arrival Plus World Elite MasterCard credit cards both offer travelers flexible rewards that can be used directly towards travel expenses, without the unreasonably high APR. For those who want to earn rewards and can pay off the balance every month, consider the Premier Rewards Gold Card from American Express, which earns Membership Rewards points.
The ContinentalFinance Reflex Card
Perhaps the worst card on our list is one of the lesser known cards in the world – and possibly for good reason. The ContinentalFinance Reflex Card is targeted towards those who do not have any credit or bad credit, with promises of an immediate minimum credit line of $500 after approval. In this case, holding the card comes with a high cost.
Individuals who open this card are charged $125 for the first year, followed by a $10 monthly fee. After the first year, the annual fee drops to $96 per year, on top of the monthly fee. To hold credit, cardholders pay over $200 in fees, with nothing in exchange.
Better Choice: Literally anything else.
Although building credit is a process, it doesn’t mean future frugal travelers are forced to accept terrible products. By knowing the downsides of the world’s worst cards, everyone can make better credit decisions ahead of their next adventures.
Which are the worst credit cards you have run across in your travels? Share your experiences in the comments below!
Written by Frugal Travel Guy @ http://www.frugaltravelguy.com
Written by Frugal Travel Guy @ http://www.frugaltravelguy.com