credit cards, wallet, consumers, worst credit, Consumer ReportsIf you're in the market for a new credit card, you picked the best time to go shopping. That's because the November issue of Consumer Reports has done us all a service by revealing the two worst credit cards you could get your hands on. The top spot -- and the one you want to avoid above all others -- goes to First Premier Bank MasterCard.

So just what was it that earned this card its dishonorable title? For starters, the processing charge is steep and not even consistent. Depending on when you go to First Premier's website, you might get zinged with a processing charge of $25 -- or $95. (The first time I looked, it was $45. The second time, $25. Keep it up, and the fee is all over the map.)

At $75, the annual fee is high, too. And the APR ranges from 23.9% to 59.9% on purchases and cash advances, again, depending on when you visit the site. (To be fair, as ridiculous as a 59.9% APR is, it's better than the 79.9% that First Premier offered last year.)

What this means, says Consumer Reports, is that you'll spend anywhere from $100 to $170 in fees during your first year, and considering you're only going to get a $300 credit limit, those fees are pretty sorry indeed. In fact, even if you get your credit ceiling raised, you aren't any better off. For every $100 that your credit limit increases, you'll spend another $50 in fees.

And Second Place Goes to...

The runner-up for worst credit card, according to Consumer Reports, is Platinum Zero Secured Visa from Applied Bank. In a way, I think this one might be worse than First Premier's Mastercard. While you might experience more financial damage with First Premier, Platinum Zero's marketing -- its website promises "zero worries" -- is designed to fool people and gives the credit card industry a really bad name.

See, I hear the word "zero" and I think of nothing. And that seems to be what you're getting charged at first: a 0% APR on purchases, a zero application fee and a zero annual fee.

But cardholders do indeed have something to worry about. According to Consumer Reports, the bank charges a $9.95 monthly maintenance fee that adds up to $119.40 a year. And if you're late paying your bill, you'll pay a $35 late fee. In addition, the agreement on the card says, "There is no grace period for the account. Interest charges accrue on purchases, cash advances and our charges beginning on the date the transaction occurs or on the first day of the billing cycle in which the transaction is received by us or, at our option, the date the transaction is posted to your account."

Zero worries? If I was the owner of this card, I'd worry plenty.

What Consumers Need to Know

But what if these were the only cards you qualified for? Should you take them and be happy you can at least get a credit card? Or should you go for some alternative like a secured credit card or a pre-paid card?

I sought out Beverly Harzog, a financial guru, author and spokesperson for CardRatings.com, a credit card review and comparison site, to get her thoughts on the matter. If these are your only options, Harzog thinks going for a secured credit card is a reasonable move. But even then, she cautions, "You have to be on your toes and watch out for a few things. First, you want to make sure that the card issuer reports to the credit bureaus. If they don't, this will not improve your FICO score or help you build a credit history.

"Second, be sure you know exactly what the fees for the card are. You'll [want to look for] fees such as activation fees, monthly maintenance fees and even ATM transaction fees," Harzog says. "Third, compare interest rates before you pick a secured card. I like the Public Savings Bank Secured Card, which has a zero percent introductory APR for six months and a regular APR of 11.24%."

Whatever you do, don't give up and assume there's no hope for you and your finances. As Harzog says, "No matter what your FICO score or how limited your credit history is, you still have choices." Choices, I should add, far beyond those from First Premier or Platinum Zero.

Still, if you can't qualify for a credit card and don't want to get a pre-paid card, which comes with fees and can't help you establish either a credit history or credit score, then remember you still have another option: cash. There's something to be said about socking away some money in a savings account until you really need it. And the feeling of not getting slammed with hidden fees or a 59.9% APR? Priceless.

Geoff Williams is a frequent contributor to WalletPop. He's also the co-author of the book Living Well With Bad Credit.



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