The Best And Worst Credit Cards
Time To Go Get A Military Credit Card
In a survey of more than 36,000 cardholders conducted by Consumer Reports, five of the largest MasterCard and Visa issuers, JPMorgan Chase, Bank of America, Citibank, Capital One, and HSBC (which together control about 80% of the market) earned crappy rating scores.
The Highest Scores Go To….
The card issuer USAA Federal Savings, which scored 95 points out of a possible 100, earned the highest rating. The Navy Federal Credit Union and other credit unions followed suit with high scores. The top three rated issuers charged interest rates between 9% and 11%. Until recently the USAA Federal Savings card has been limited to members of the military, retired military personnel and their families. It’s now opened up its membership policy so that almost anyone can join. Credit unions are run by their members, so they are more likely to take care of you if you have a problem, and they are less likely to suddenly increase their interest rates.
The military rate are much lower than the two lowest-rated issuers, Direct Merchants (scoring 67 points) and Washington Mutual’s Providian (earning 61 points), which both charge 17%. Consumers also said they were very satisfied with the two popular credit cards American Express and Discover, whose median interest rates are 14% and 15%. Cardholders said that they had far fewer billing headaches and other problems with the card issuers at the top of the ratings.It’s more important than ever to have a card with a higher Consumer Reports rating because the lower-rated ones can cost you a lot due to their higher interest rates and fees.
And The Losers…
Consumers who used the MasterCard and Visa bank cards through JPMorgan Chase, Bank of America, Citibank, Capital One, and HSBC, complained that they were assessed unfair late fees or experienced unexpected interest-rate increases. Providian had the worst ratings for unexpected interest-rate hikes. Cardholders said their bills arrived too late for them to get their payments in on time, and they were more likely to be charged a late fee even when they sent their payments a week before the due date. 28% of cardholders surveyed who pay the highest interest rates (interest of more than 25%) reported that their rate increase was due to a universal default clause. !!Dam that Universal Default Clause!! Cards that employ a universal default allow issuers to increase rates if a consumer makes late payments on other accounts, such as car loans, mortgages, or other credit cards. The survey said penalty fees for late payments more than doubled in the last 12 years, from an average of $13 in 1995, to $28 this year. Some fees were even has high as $39. Gasp!
