Since the Great Recession began, most major credit card companies ceased offering credit cards to consumers with bad credit. This move has left millions of Americans with bad credit very few options and opened the door for companies that continue to issue bad credit cards to charge exorbitant interest rates and fees. Consequently, some of the worst credit cards in history are being marketed to American consumers today. These are the worst of the bunch:
First Place and the Worst Credit Card in History
The Anacott Financial Credit Card hit the market in early fall and, on the surface, appeared to be the best credit card for people with bad credit. It had no annual fee, a 6.9% introductory interest rate, and promised unsecured credit limits of over $1,000. However, this deal proved too good to be true.
In September, Nerdwallet took a closer look and uncovered unsettling details about the card and the company behind it. By early October, the web was filled with complaints from consumers who had applied and never received the credit card. Then, in late October, the Anacott credit card began arriving in people's mailboxes. And the people who applied and paid a $99 application fee were livid.
The Anacott "credit card" is a credit card by definition, as it extends credit for people to buy goods and services. Unfortunately, the only goods and services that can be bought with this card are credit repair products from Anacott, a company that is dubious at best. So even though it may be a stretch to call this a credit card, the Anacott Financial piece of plastic is hands down the worst "credit card" ever marketed to the American public.
Second Place and the Worst Credit Card that is Actually a Credit Card
Unlike the Anacott credit card, the First PREMIER Gold credit card is a real credit card. It is also a really bad credit card. While the terms and conditions of this offer change frequently, the current version of this credit card carries an astronomical, unheralded 59.9% interest rate. And that's not even the worst of it.
When you apply for the First PREMIER Gold credit card, you have to pay a $45 processing fee upfront. If approved, you are instantly charged a $75 annual fee which is deducted from an initial credit line of $300. This means that, after spending $120 to get this card, you will be paying 59.9% interest to First Premier on the $75 annual fee and only have $225 of available credit.
Unfortunately, just having a $300 credit limit is a good thing since paying only the minimum monthly payment would literally keep you in debt for life.
To make matters worse, First Premier rewards cardholders with credit limit increases and charges a fee equal to 50% of that increase (and then charges you 59.9% interest on it). The credit limit increase fee is, "automatically assessed upon approval of a credit limit increase."
Second Place – Tie
If you don't like the First Premier Gold credit card, First Premier offers the same deal with its Aventium Classic credit card. You get the same great 59.9% interest rate and all the same fees. The only difference is the name.
Second Place – Tie
So you avoided the First Premier Gold card and the Aventium Classic credit card offers. You should be in the clear. Unless you find First Premier's other mind-boggling offer, the Centennial Gold Card. Once again, you get a 59.9% interest rate and a bevy of fees.
Final Thoughts
If you have bad credit and want to get a credit card, your best option is to shut off your computer and head to the bank where you keep your checking or savings accounts. Because you do business with them, they may be more likely than other banks to extend you credit. And, while they may not offer you an unsecured credit line, they may offer you a secured credit card that can help you rebuild your credit.
Lastly, beware of credit card offers targeted to people with bad credit such as the Anacott credit card. If you have bad credit, you are not going to find a 0% APR credit card with 5% cash back rewards. You are going to find one with a high interest rate and obscene fees. So always remain cautious about deals that seem too good to be true while avoiding offers that are too bad to be false.
Photo Credit: http://www.flickr.com/photos/myloonyland/
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