For some reason I really enjoy stumbling upon atrociously bad financial offers. Be it a prepaid debit card (like Suze Orman’s monstrosity), a horrible checking account or Rent A Center, there is just something about staring an obviously bad deal in the face and laughing at it. I wouldn’t call myself a consumer advocate per se, but I kind of am. Anyway, the problem is that they are offering the deal because some people will get it. There are people who did get Suze Orman’s card. Rent a Center does seem to be a big successful business (they have a commercial with Hulk Hogan!), even thought it allows people to mortgage their future for TV’s and appliances. As the saying goes, there’s a sucker born every minute. And that’s what sneaky businesses like these bet on.
I have found another such business. They offer what seems to be the worst credit cards of all time. I got mailings from them every so often but a cursory look showed me their cards sucked. My brother actually gave me some details on how bad they are, so I thought it would share some of the “features” of their card. The company is called Credit One and this is what their logo looks like:
So they have the word “credit” in their business name and clearly ripped off the Capital One logo. Great start. The only way to get a credit card from these fine folks is to respond to an offer received in the mail. That’s right, you have to be CHOSEN by them. What an honor.
The card I will use to show how ridiculous of a business this is will be their gas rewards card. Anyone who reads this blog knows that I love credit card rewards. Most of the good cash back rewards programs have a base 1% cash back and the ability to earn up to 5% in some categories. They even come with great sign up bonuses. Credit One’s gas “rewards” program allows you to get 1% on gas ONLY. That’s it. No sign up bonus. Not even a base 1% on everything else. Besides this laughable perk, here are a few more gems from their list of fees and rules:
-Their mailings state that your credit limit will be up to $1,500. Many of the reviewers online have said that when you get the card they start you at a limit of $300 instead! (That’s $3 back if you use your entire limit for gas only. Talk about raking it in.)
-The APR on their cards is 23.9%. A very high rate to be sure, but it’s a credit card. As long as you pay your balance on time and in full you have nothing to worry about right? Not the case with Credit One. Interest starts accruing on your purchases from the day they post! That means as soon as you make that piddly 1% cash back purchase at the gas station, you’re going to start paying interest. Not if you don’t pay your balance in full like most cards. But if you BUY ANYTHING! This is probably the most disgusting feature of this card but they can certainly do it because it’s right in their cardholder agreement.
-There are some good cards out there that have an annual fee. Chase Sapphire Preferred and Barclaycard’s Arrival come to mind. They have awesome signing bonuses and great reward options. The cards from Credit One have an annual fee. To the tune of $75 in year 1. And $99 every year after. That’s more than the Sapphire Preferred for a much crappier card.
So we’re talking about a card with a $99 annual fee, with a $300 credit limit, which charges a high interest rate right away and has measly gas rewards only. They also don’t post your payment for TEN business days. So you could pay them from your checking account 9 days before the due date and still be charged a late fee. No one in their right mind should get a card like this, even with poor credit. I would call this a scam, but all their charges are written in black and white. They’re just hoping no one reads them and realizes they’re in for a world of financial hurt.
I realize that these cards are for people with poor credit or who have declared bankruptcy recently, but there are a number of good secured cards that won’t charge you fees from Bank of America and Capital One. These can slowly help you build up a poor credit score without the ridiculous fees. Companies like Credit One are preying on people that don’t read fine print and who may be in a desperate situation. While you could say that anyone who signs up for the card has got it coming, Credit One clearly doesn’t have the best of intentions. If it hasn’t already been made clear, stay far away from this company.