Six “WTF?” Credit Cards
Since we credit card nerds spend so much time researching cards and reading all of their wacky terms and conditions, occasionally we stumble across some things that are just plain absurd. Some are geared towards the ultra-wealthy and will never be of use to most of us, and some just use ludicrous marketing to convince us to sign up for cards that make no financial sense.
Here’s a selection of some of our favorites:
Everyone’s heard about the mysterious Amex Black Card that is limited to royalty and other celebrities. Well Visa wanted to step into the exclusivity ring too, so they’ve unveiled their own White Card (Get it? It’s different because it’s not black, it’s white). The website states that Stratus Rewards is an “intimate, by-invitation only club” and that members can redeem their rewards points for “private jet travel … or life-inspiring experiences.” Who needs cash or frequent flyer miles when they can get inspiration and a ride on a G5? We considered adding this card to our database, but first we’d have to change our “how much do you spend?” input to accept numbers up to $1mm, and we’d have to figure out how to put a dollar value on prestige.
I read about this card in the Huffington Post back in December, and it caught my eye because it offered a low-low APR of 79.9%!! Premier Bank specializes in subprime lending (also known by its government name, usury lending), and before this year’s credit card regulations went into effect, they were getting away with charging a minimum of $256 in fees for a $300 credit line. But when they realized the new laws would limit them to charging $75 in fees on that same $300, they decided to make up their margins by increasing their 9.99% APR by a factor of EIGHT. To put this in perspective, you’d end up accruing about $20 in interest each month on that $300, and if you only paid the minimum payment (which is usually 3-5% of the balance), you would be paying off that balance for all of eternity. That’s not an exaggeration, it actually wouldn’t be mathematically possible to pay it off.
3 ) PAYjr card
Maybe I don’t see the value here because I don’t have kids, but I’m filing this in the “things no one needs” category. This card is trying to corner the allowance market by giving parents an internet interface for assigning chores and keeping track of their in-house payroll. The catch? You pay $9.95 to sign up, 50 cents every time you put money on the card, and a “small Monthly Service Fee” of $4.95. So you effectively pay a $60 annual fee for the privilege of paying your kids an allowance. I guess this would be perfect for parents who communicate with their kids exclusively over their iPhone email, and for kids who won’t mow the lawn unless they know it’ll earn them a PS3.
4 ) Chase ASPCA Card
This one has since been discontinued, but a little over a year ago it was possible to sign up for this card, for which Chase would send 0.2% of every dollar you spent to the ASPCA. That would’ve sounded like a great idea while their marketing geniuses were assaulting your soul with sappy Sarah McLachlan songs and pictures of abused kittens. But if you could somehow find it in you to think clearly, you’d realize that you would be much better off if you got a cash back card, earned 2% on your purchases, gave a much-higher 1% to the ASPCA, got a tax benefit for the donation, and still pocketed the other 1%. You could save the puppies, make Sarah McLachlan happy, and earn some rewards for yourself. Everyone wins (except maybe Chase).
I’m looking at you, Russell, when I say that you should be a leader in your community, helping all of the people that supported you on your rise to stardom. But instead you turn to bad-credit and low-income lending, and leverage the power of your brand to create your own shady prepaid credit card, complete with ridiculous fees (we wrote about some of the problems with prepaid cards a while back). And to top it off, the Baby Phat logos, the pictures of diamonds on the cards, and the images on your website make it very clear who you are targeting. For shame!
My original post was only supposed to be five cards, but I just caught wind of this one from the Consumerist this morning. It’s only a prototype, so no banks are using it yet, but supposedly this card displays your available credit on the card itself. You walk up to the cash register with that new cashmere sweater, whip out your card, and it’s right in your face telling you, “Uh uh, better put it back. You ain’t got no money, honey.” The claim is that this will help you limit your spending, but if you shop to the point where you need your credit card to reprimand you, you’ll probably just call and get your limit raised anyway.
Am I Taking Crazy Pills?
Is anyone out there signing up for these cards (the first five anyway)? Do you know anyone who has, or could you think of any scenarios where these might actually be useful?
If so, let me know below!