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 seven credit card offers that you should try to avoid altogether. Next, learn what credit card companies know about you, credit card rules you should never break, and what happens when your credit card is stolen.
Bad offer for cash back
The cards you should avoid are the ones that offer no rewards, Gonzales says. “Some cards only have minor promotions, like $5 off on oil changes,” she says. Instead, consider a card that offers more rewards, like 2 to 5% cash back, travel perks and no annual fee. 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
Some annual fees are in the hundreds—nearly thousands!—and the rewards rate just isn’t worth it. If you’re on the market for a new credit card and want the most travel rewards, Gonzalez recommends looking for one with a high rewards rate, like two miles for each dollar you spend. Some cards also offer a bonus of 50,000+ miles if you spend a certain amount in the first few months. 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
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. If a card offers several points or cash back for each dollar you spend at all gas stations, it’s more than the average rewards card will give you.
Bad offer for balance transfers
Avoid credit cards with a short 0 percent intro APR period. Some cards are both expensive, charging a balance transfer fee, but they also only offers 0 percent intro APR for six months before it skyrockets up. “A better option for transferring your balance would be a 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
Some credit cards have a high percentage interest rate and also charge a processing fee before opening an account. On top of that, there can be expensive annual fees upwards of $100, depending on your credit limit, Gonzalez says. After that, you still might have to pay a yearly fee, a monthly fee, and a 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
Almost every major retailer offers its own credit card, but some are worse than others. Watch out for cards that offer no rewards program and no details on its special member offers. The value is supposed to be promotional financing on specific purchases, but sometimes there’s a catch—like instead of offering a traditional 0 percent intro APR, it’s a deferred-interest plan.
In that case, if you don’t pay off the purchase in full before the promotion ends, you’ll owe interest 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 Michael Zaino, president of TZG Financial. “That doesn’t seem fair, but that’s one way they get you!”
Bad offer for students
A handful of student credit cards offer decent rewards, but not all of them. For example, sometimes you’ll earn a few points per dollar spent on things like insurance premiums as well as points for every few dollars you spend elsewhere. As a college student, you’re not likely spending much on insurance products, if at all. Instead, consider a card with perks like cash back on every purchase you make it you pay on time. It’s all about building your credit and learning how the system works! 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.