That’s kind of a loaded question! For several reasons, most all credit cards bear watching! As balances on often used credit cards can quickly increase, cardholders are often left with high payments and limited opportunities to extend their credit further.
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Among the worst credit cards currently on the market is the First Premier Bank card. This card might be considered a secured credit card at least in part, as it requires a $95 dollar deposit for its initial $300 credit line! The APR on the Premier Bank credit card is a whopping 49.9%! Membership fees for the first year are $75 and increase to $120 per year after that.
According to Time Magazine, another credit card to avoid is the Visa Black card. This supposed luxury card carries a $495 annual fee and boasts a 1% cash back premium. Just about any credit card on the market does that and more, at a far lower cost!
Credit Card More Problematic a Few Years Ago
Until recently, many credit card issuers routinely engaged in billing practices that were often detrimental to cardholders; causing many to default on their credit card accounts or as a last resort, file for bankruptcy. These practices included dramatically changing the interest rates, reducing credit limit on all of your cards with that lender, and adding large fees as penalties.
Essentially banks and other card issuers could change the terms of cardholders’ accounts with no warning!
At the very least, this kind of information was often buried deep in the fine print of most credit card agreements. As a result, by early 2008 credit card default rates had reached twenty-year record highs, peaking at just over 10% of all outstanding credit card accounts!
How To Avoid Problems With Credit Cards
According to the Public Broadcasting System (PBS), more than 35 million Americans make only minimum payments on their credit card accounts each month. This represents one fourth of all credit cardholders!
Consistently making only minimum payments can eventually lead to problems. As an example, if you were to pay an average minimum payment of $100 each month against a current credit card balance of $5,000, it would take you more than 20 years to pay off the account in full! Moreover, that’s if you throw the card in a drawer, not to be used again!
Smart consumers should be aware that unless balances are paid in full each month, over time you would pay dearly for the new sweater you charged last weekend or the business lunch tab you graciously picked up with your personal credit card.
Your Consumer Rights Regarding Credit Cards
The Credit Card Act of 2009 helped level the playing field for credit card providers, which in turn, benefits credit card holders. Federal laws eliminated many inequities in the billing practices of banks and other credit card issuers. The following are among the most important changes included in the Credit Card Act:
- The Act regulates increases in APR rates and other changes in credit card terms. Consumers must be provided with a 45-day warning of impending changes. Consumers may opt out of these changes by closing the credit card accounts and paying off any outstanding balances under the terms of their original agreements.
- The Act prevents banks from charging unnecessary and/or exorbitant fees.
- Credit card applications must all be treated fairly and approved or rejected in a consistent manner.
- Required monthly credit card payments must be scheduled at the same time each month.
- The Credit Card Act also protects the rights of credit card customers who demonstrate fiscal responsibility. Disclosures must be accurate and the terms and conditions of card ownership and use must be clearly stated.
- The Act strengthens government oversight of the credit card industry and increases penalties for infractions of the law.
The Credit Card Act provides a number of safeguards for students and other consumers under the age of 21. Credit card issuers are now prevented from openly marketing to students on college campuses. Younger applicants must qualify for a credit card or provide a qualified co-signer.
Gift cards now have extended lives of at least five years from their date of issuance.
A summary of the major terms of the Credit Card Act of 2009 is available at, a website sponsored by the banking and finance committee of the United States Senate.
While credit card contract terms must be clear-cut and explained properly, all credit cards in your wallet or purse should be managed carefully to avoid future problems. Many consumers already manage their credit accounts well, as 38% of Americans manage to pay their credit card balances in full each month.
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