In this issue, you'll find CA's survey of 100 standard credit cards from 68 banks. Fifty-seven of the cards do not have annual fees, and most have variable interest rates tied to the prime lending rate.

Table of Contents

• Standard Credit Card Survey at a glance
• 1997 Survey of Standard Credit Cards
• Watch out for credit card fees
• Keep credit card costs in check

Note: Use this information as a general guide only; consult with a local consumer group for laws specific to your state.

Neither CA's surveys nor its interpretation of survey results may be used in advertising or for any other commercial purposes. CA will take all steps necessary to prevent commercial use of its surveys or name.

Copyright ©1997 Consumer Action.

 

Standard Credit Card Survey at a glance

All cards are available nationally. See survey for phone numbers and more information.

Five lowest rate cards with no annual fees

• AFBA Industrial - 11.4% (Var)
• Bank of Canton - 11.5% (Fix)
• PNC National Bank AAA Card - 12.25% (Var)
• Boatmen's Credit Card Bank - 12.4% (Var)
• Pullman Bank - 12.5% (Var)

Five lowest rate cards with annual fees

• Pulaski Bank & Trust - $35 at 7.99% (Var)
• Huntington National Bank - $50 at 8.5% (Var)
• Star Bank - $65 at 8.5% (Var)
• Wachovia Bank - $88 at 8.5% (Var)
• Federal Savings Bank - $33 at 9.35% (Var)

(Var): Variable interest rate; (Fix): Fixed interest rate

 

1997 Survey of Standard Credit Cards

Use Note: Consumer Action's Credit Card Survey is intended solely for the use of our readers and reporters to whom it is sent. Nothing in the survey may be used in advertising or for any commercial purpose.

PLEASE NOTE: This survey is not current, and should be used only as a guide. For up-to-date rate information, we suggest that you contact credit card issuers directly or visit www.bankrate.com or www.cardtrak.com.

APR - Annual Percentage Rate

(Var) - Variable interest rate

(Fix) - Fixed interest rate

Definitions:

Grace Period: The number of days in which you can pay off new bills without being charged interest-if there is no prior balance. Unless otherwise noted, cards have a 25-day grace period.

Annual Percentage Rate: The finance charge expressed in terms of an annual figure, a percentage of the amount owed. APRs listed are for purchases-cash advances may carry a higher APR.

Notes:

a) Survey conducted during May-June 1997 by Guadalupe Aguilar, Nancy McAdoo, Nelson Santiago and Linda Sherry of the CA staff.

b) Survey does not include teaser rates.

c) Asterisk next to annual fee denotes that fee may be waived (or charged) if certain usage requirements are (or are not) met.

d) In the case of variable rates, the APR may not reflect recent changes in the index, such as the Prime or Federal Discount Rates.

Credit Cards with No Annual Fees (lowest APRs at top of list)

Financial Institution Phone Number	APR	Additional Information
AFBA Industrial • (800) 776-2265	11.4% (Var)	Cash advance fee: 2%/$2 min./$10 max. Late fee: $15. APR is Prime + 2.9%, but never less than 11.4%.
Bank of Canton • (415) 362-4100	11.5% (Fix)	Cash advance fee: 2%. Late fee: $3-$5. Over the limit fee: $10 per transaction/$30 max. per day.
Union Federal Savings • (800) 242-9910	11.5% (Fix)	Cash advance fee: 2%/$10 max. Late fee: $15. Over the limit fee: $20. (Available only in IN.)
PNC National Bank - AAA Card • (800) 762-9902	12.25% (Var)	Cash advance fee: 2%/$3.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.9%. Cardholders must be members of the Automobile Association of America.
Boatmen's Credit Card Bank • (800) 426-6420	12.4% (Var)	Cash advance fee: 3%/$3 min./$18 max. Late fee: $18. Over the limit fee: $18. APR is Prime + 5.9%.
Pullman Bank - Privileges Classic • (800) 785-5626	12.5% (Var)	Cash advance fee: 2%/$2 min/$20 max. Late fee: $10. Over the limit fee: $10. APR is Prime + 4%.
USAA Federal Savings Bank • (800) 922-9092	12.75% (Var)	No cash advance, late or over the limit fees. APR is Prime + 4.25%.
Key Bank - Key Smart Card (no fee) • (800) 539-2968	12.9% - 19.8% (Fix)	Cash advance fee: 2%/$2.50 min./$25 max. Late fee: $20. Over the limit fee: $20. On Key Smart Cards, rate drops when you make a higher monthly payment than required.
FCC/NBD Bank • (800) 368-4535	13.4%-19.8% (Var)	Cash advance fee: 2%/$2.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 9.9%. (Applicants with good credit may get a better interest rate.)
Astoria Federal Savings Bank • (800) 535-6806	13.5% (Var)	Cash advance fee: 2%/$2 min./$20 max. Late fee: $10. Over the limit fee: $15. APR is Prime + 5.25%. No grace period.
Commerce Bank • (800) 937-2000	13.9% (Fix)	No cash advance fee. Late fee: $5. Over the limit fee: $5. (Available only in NJ, PA & DE.)
Liberty Savings Bank • (303) 295-7200	13.9% (Fix)	No cash advance fee. Late fee: 5% of amount past due/$5 min. No over the limit fee. $10 credit on balance transfers.
Metropolitan Savings Bank • (800) 837-6058	13.9% (Fix)	No cash advance fee. Late fee: $10. Over the limit fee: $10.
GE Rewards Card • (800) 437-3927	13.9%-19.4% (Var)	Cash advance fee: 2.5%/$2 min./no max. Late fee: $20. Over the limit fee: $20. APR varies with Prime Rate. Applicants with good credit may get a better interest rate.
First USA Bank • (800) 537-6954	13.99% (Fix)	Cash advance fee: 2%/$10 min. Late fee: $20. Over the limit fee: $20.
Bank of New York - Consumers Edge • (800) 942-1977	14.4% (Var)	No grace period on purchases. Cash advance fee: 2%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 5.9%.
Amalgamated Bank of Chicago • (800) 723-0303	14.25% (Var)	Cash advance fee: 2%/$2 min./$20 max. Late fee: $10. Over the limit fee: $10. APR is Prime + 6%.
Mellon Bank - Coast-to-Coast Card • (800) 753-7011	14.40% (Var)	Cash advance fee: 2%/$3 min./$20 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 5.9%. Cardholders can earn free stays at Coast-to-Coast campground chain.
Ohio Savings Bank - Prime Card • (800) 987-6446	14.40% (Var)	Cash advance fee: 2%/$2 min./$20 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 5.9%.
Star Bank • (800) 999-0619	14.40% (Var)	Cash advance fee: 2%/$3 min./$10 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 5.9%.
Travelers Bank • (800) 772-1775	14.40% (Var)	Cash advance fee: 2%/$2 min./$25 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 5.9%.
Security Savings Bank • (800) 573-6089	14.49% (Var)	Cash advance fee: 2%/$2 min. Late fee: 5%/$15 min. Over the limit fee: $15. APR is Prime + 5.99%.
First Virginia Bank • (800) 634-8803	14.70% (Fix)	Cash advance fee: 2%/$2 min./$20 max. Late fee: $15. Over the limit fee: $20.
Ohio Savings Bank - Classic Fixed Card< • (800) 987-6446	14.75% (Fix)	Cash advance fee: 2%/$2 min./$20 max. Late fee: $15. Over the limit fee: $15.
Fidelity National Bank • (800) 753-2900	14.90% (Fix)	Cash advance fee: 4%/$5 min. Late fee: $20. Over the limit fee: $20.
Wachovia Bank • (800) 241-7990	15.4% (Var)	Grace period: 20 days. Cash advance fee: 4%/$3 min. Late fee: $18. Over the limit fee: $18. APR is Prime + 6.9%.
Citizens Bank • (800) 438-9222	15.65% (Var)	Cash advance fee: 2%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.15%.
First USA (Trust of New Jersey) • (800) 955-9900	15.9% (Fix)	Cash advance fee: 2%/$10 min. Late fee: $20. Over the limit fee: $20.
Mellon Bank - Classic • (800) 753-7011	16.15% (Var)	Cash advance fee: 2%/$3 min./$20 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.9%.
Republic National Bank • (800) 533-5008	16.15 (Var)	Cash advance fee: 3%/$3 min./$10 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 7.9%.
Bank One • (800) 945-2006	16.24% (Var)	Cash advance fee: 2%/$2 min./$15 max. Late fee: $15. Over the limit fee: $15. APR is LIBOR + 10.75%.
American Express - Optima • (800) 635-5955	16.4% (Var)	Cash advance fee: 2%/$2.50 min./$20 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 6%.
Bank of Boston • (800) 252-2273	16.4% (Var)	Cash advance fee: 2.5%/$3.50 min. Late fee: $18.50. Over the limit fee: $18.50. APR is Prime + 7.9%.
Citizens Bank - Good Citizen Card • (800) 438-9222	16.4% (Var)	Cash advance fee: 2%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.9%.
First Western Bank • (800) 545-7899	16.4% (Var)	Cash advance fee: 2%/$2 min. Check advances: 1%/$2 min./$10 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 9.9%.
Huntington National Bank - Prime Plus Card • (800) 237-7400	16.4% (Var)	Cash advance fee: 2%/$2 min. Late Fee: $20. Over the limit fee: $20. APR is Prime + 7.9%.
PNC National Bank • (800) 762-2273	16.4.% (Var)	Cash advance fee: 2%/$3.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.9%.
First of America Bank • (800) 423-3883	16.9% (Var)	Cash advance fee: 2%/$2 min./$25 max. Late fee: $18. Over the limit fee: $18. APR is Prime + 8.4%.
Household Bank • (800) 477-6000	16.9% (Var)	Cash advance fee: 2.5%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 8.4%.
Oak Brook Bank • (800) 536-3000	16.9% (Var)	Cash advance fee: 3%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.4%.
American Express - Optima True Grace • (800) 635-5955	17% (Fix)	Cash advance fee: 2%/$2.50 min./$20 max. Late fee: $20. Over the limit fee: $20.
MBNA America • (800) 441-9977	17.24% (Var)	Cash advance fee: 2%/$2 min./no max. Late fee: $18. Over the limit fee: $18. APR is Prime + 8.99%.
Union Planters National Bank • (800) 582-6231	17.25% (Var)	Cash advance fee: 2%/$2 min./$20 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 8.75%.
AT&T - Universal Card • (800) 662-7759	17.4% (Var)	Cash advance fee: 2%/$2 min./$20 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 9.1%.
Bank of New York - Consumers Edge 25 • (800) 942-1977	17.4% (Var)	Grace period: 25 days. Cash advance fee: 2%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 8.9%.
Greenwood Trust Co. - Bravo Card • (800) 272-8693	17.4% (Var)	Cash advance fee: 2.5%/$2 min./$2.50 if at ATM. Late fee: $15 if more than 15% over limit. APR is Prime + 8.9%.
Greenwood Trust Co. - Discover Card • (800) 347-2683	17.4% (Var)	Cash advance fee: 2.5%. Late fee: $20. Over the limit fee: $20. APR is Prime + 8.9%.
First National Bank of Omaha • (800) 688-7070	17.62% (Var)	Cash advance fee: 2%. Late fee: $20. Over the limit fee: $20. APR is Commercial Paper Rate + 12%.
Citibank - Classic • (800) 950-5114	17.65% (Var)	Grace period: 20-25 days. Cash advance fee: 2%/$2 min./no max. Late fee: $20. Over the limit fee: $20. APR is Prime + 9.4%.
Fleet Bank (incorporating Norwest Bank) • (800) 225-5353	17.7% (Var)	Cash advance fee: 2%/$2.50 min./$15 max. Late fee: 0-$15 (varies by state). Over the limit fee: 0-$15 (varies by state). APR is Prime + 9.2%.
Bank of America • (800) 243-7762	17.74% (Var)	Cash advance fee: 2%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 9.49%.
Chase Manhattan Bank • (800) 242-7324	17.9% (Var)	Cash advance fee: 2%/$2 min./$20 max. Late fee: $18. Over the limit fee: $18. APR is Prime + 9.4%.
Bank of New York - Toys 'R' Us Card • (800) 207-8472	18.15% (Var)	Grace period: 25 days. Cash advance fee: 2%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 9.9%.
NationsBank • (800) 759-6262	18.4% (Var)	Cash advance fee: 2.5%/$2.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 9.9%.
Great Western Bank - Rebate Visa • (800) 382-3334	19.4% (Var)	Cash advance fee: 3%/$3 min. Late fee: $18. Over the limit fee: $18. APR is Prime + 10.9%.
Crestar Bank • (800) 368-7700	20.40% (Var)	Cash advance fee: 2%/$2 min./$20 max. Late fee: varies by state/$20 max. Over the limit fee: $20. APR is Prime + 12.9%. (APR may be lower if applicant has good credit.)
Mellon Bank - Cornerstone • (800) 753-7011	20.4% (Var)	Cash advance fee: 2%/$3 min./$20 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 11.9%. After three years you can obtain a 10% refund of all interest paid.

Credit Cards with Annual Fees (lowest APRs at top of list)

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Pulaski Bank & Trust • (800) 980-2265

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• Annual Fee : $35
• APR : 7.99% (Var)
• Additional Information : No cash advance fee. Late fee: $15. Over the limit fee: $15. Annual fee is $25 for Arkansas residents. APR is Federal Discount Rate + 5%.

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Huntington National Bank • (800) 237-7400

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Prime Card

• Annual Fee : $50
• APR : 8.5% (Var)
• Additional Information : Cash advance fee: 2% (waived first 90 days). Late Fee: $20. Over the limit fee: $20. APR is equal to Prime Rate.

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Star Bank • (800) 999-0619

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• Annual Fee : $65
• APR : 8.5% (Var)
• Additional Information : Cash advance fee: 2%/$3 min./$10 max. Late fee: $20. Over the limit fee: $20. APR is Prime Rate.

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Wachovia Bank • (800) 241-7990

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Prime for Life Card

• Annual Fee : $88
• APR : 8.5% (Var)
• Additional Information : Grace period: 20 days. Cash advance fee: 4%/$3 min. Late fee: $18. Over the limit fee: $18. APR is Prime Rate.

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Federal Savings Bank (FSB) • (800) 374-5600

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• Annual Fee : $33
• APR : 9.35% (Var)
• Additional Information : Cash advance fee: 2%/$2 min. Late fee: $15. Over the limit fee: $15. APR is Federal Discount Rate + 5%.

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Great Falls Bank • (201) 942-1111

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• Annual Fee : $15
• APR : 9.6% (Fix)
• Additional Information : No cash advance fee. Late fee: $10. Over the limit fee: $15. Available only in NJ.

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Simmons First National • (800) 636-5151

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• Annual Fee : $35
• APR : 9.9% (Var)
• Additional Information : No cash advance fee. Late fee: $15. Over the limit fee: $10. APR is Federal Discount Rate + 5%.

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Metropolitan National Bank • (800) 883-2511

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• Annual Fee : $25
• APR : 9.96% (Var)
• Additional Information : No cash advance fee. Late fee: $10. Over the limit fee: $10. APR is Federal Discount Rate + 5%.

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Arkansas Federal Savings Bank • (800) 477-3348

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• Annual Fee : $35
• APR : 10% (Var)
• Additional Information : Cash advance fee: 2.5%/$2.50 min. Late fee: $18. Over the limit fee: $18. APR is Prime + 1.75%.

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Central Carolina Bank • (800) 334-1074

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• Annual Fee : $29
• APR : 10.75% (Var)
• Additional Information : Cash advance fee: 2%/$2 min./$25 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 2.5%.

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Key Bank • (800) 539-2968

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Key Smart Card (with fee)

• Annual Fee : $20
• APR : 10.9% - 16.9% (Fix)
• Additional Information : Cash advance fee: 2%/$2.50 min./$25 max. Late fee: $20. Over the limit fee: $20. On Key Smart Cards, interest rate drops when you make a higher monthly payment.

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Atlantic Stewardship Bank • (201) 444-7100

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• Annual Fee : $15
• APR : 10.99% (Var)
• Additional Information : No cash advance fee. Late fee: 1% of past due amount. Over the limit fee: $5. APR is Prime + 2.49%.

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Amalgamated Bank of Chicago • (800) 723-0303

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• Annual Fee : $37
• APR : 11% (Var)
• Additional Information : Cash advance fee: 2%/$2 min./$20 max. Late fee: $10. Over the limit fee: $10. APR is Prime + 2.75%.

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Republic National Bank • (800) 533-5008

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• Annual Fee : $18
• APR : 11.15% (Var)
• Additional Information : Cash advance fee: 3%/$3 min./$10 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 2.9%.

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NationsBank • (800) 759-6262

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• Annual Fee : $39*
• APR : 11.4% (Var)
• Additional Information : Cash advance fee: 2.5%/$2.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 2.9%.

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First Union Bank • (800) 359-3862

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Low Rate Option

• Annual Fee : $39
• APR : 11.40% (Var)
• Additional Information : Cash advance fee: 2.9%/$2.95 min./$29.50 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 2.9%.

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Union Bank • (800) 542-6034

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• Annual Fee : $24
• APR : 12.2% (Var)
• Additional Information : Cash advance fee: 2%. Late fee: $8. No over the limit fee. Available only in CA, OR & WA. APR is Prime + 3.8%.

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Bank of Boston • (800) 252-2273

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• Annual Fee : $18
• APR : 12.25% (Var)
• Additional Information : Cash advance fee: 2.5%/$3.50 min. Late fee: $18.50. Over the limit fee: $18.50. APR is Prime + 3.75%.

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Great Western Bank • (800) 382-3334

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Frontier Visa

• Annual Fee : $18
• APR : 12.25% (Var)
• Additional Information : Cash advance fee: 3%/$3 min. Late fee: $18. Over the limit fee: $18. APR is Prime + 3.75%.

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Ohio Savings Bank • (800) 987-6446

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Classic Variable Card

• Annual Fee : $18
• APR : 12.25% (Var)
• Additional Information : Cash advance fee: 2%/$2 min./$20 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 3.75%.

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PNC National Bank • (800) 762-2273

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Prime Value

• Annual Fee : $18
• APR : 12.25% (Var)
• Additional Information : Cash advance fee: 2%/$3.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 3.75%.

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Union Planters National Bank • (800) 582-6231

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• Annual Fee : $29
• APR : 12.25% (Var)
• Additional Information : Cash advance fee: 2%/$2 min./$20 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 3.75%.

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Wachovia Bank • (800) 241-7990

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First Year Prime

• Annual Fee : $18
• APR : 12.4% (Var)
• Additional Information : Grace period: 20 days. Cash advance fee: 4%/$3 min. Late fee: $18. Over the limit fee: $18. APR is Prime + 3.9%.

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Wells Fargo Bank • (800) 642-4720

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Premium Credit Card

• Annual Fee : $18
• APR : 12.5% (Var)
• Additional Information : Cash advance fee: at ATM: 3%/$3 min.; at branch: 3%/$10 min.; by check: 3%/$5 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 4%. (Must have accounts at WF to be considered for this rate.)

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People's Bank • (800) 426-1114

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• Annual Fee : $25
• APR : 13.9% (Fix)
• Additional Information : Two cash advance fees are imposed: 2%/$25 max. and $3 per transaction. Late fee: $20. Over the limit fee: $20.

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Community National Bank • (609) 869-7900

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• Annual Fee : $25
• APR : 13.92% (Fix)
• Additional Information : No cash advance fee. Late fee: 15% of past due amount. Over the limit fee: 20% of past due amount.

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NationsBank • (800) 759-6262

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• Annual Fee : $19*
• APR : 14.4% (Var)
• Additional Information : Cash advance fee: 2.5%/$2.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 5.9%.

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First Union Bank • (800) 359-3862

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Prime Option

• Annual Fee : $20
• APR : 14.4% (Var)
• Additional Information : Cash advance fee: 2.9%/$2.95 min./$29.50 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 5.9%.

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Interchange State Bank • (201) 703-2265

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• Annual Fee : $15
• APR : 14.80% (Fix)
• Additional Information : Cash advance fee: 2%/50¢ min./$10 max. No over the limit fee. No late fee.

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Metropolitan State Bank • (201) 882-0800

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• Annual Fee : $15
• APR : 14.88% (Fix)
• Additional Information : Grace period at least 20 days. No cash advance, late or over the limit fee.

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Capital One Bank • (800) 952-3388

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Consumers Best Card

• Annual Fee : $29
• APR : 14.9% (Var)
• Additional Information : Cash advance fee: 2%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 6.65%.

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Pullman Bank • (800) 785-5626

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Classic

• Annual Fee : $12
• APR : 15.5% (Var)
• Additional Information : Cash advance fee: 2%/$2 min/$20 max. Late fee: $10. Over the limit fee: $10. APR is Prime + 7%.

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M&T Bank • (800) 845-2987

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Classic Plus

• Annual Fee : $25
• APR : 15.75% (Var)
• Additional Information : Cash advance fee: $1. Late fee: $15. Over the limit fee: $15. Annual fee waived first two years. APR is Prime + 7.25%.

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Astoria Federal Savings Bank • (800) 535-6806

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• Annual Fee : $15
• APR : 15.9% (Fix)
• Additional Information : Cash advance fee: 2%/$2 min./$20 max. Late fee: $10. Over the limit fee: $15.

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Wells Fargo Bank • (800) 642-4720

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Preferred Credit Card

• Annual Fee : $18
• APR : 15.9% (Var)
• Additional Information : Cash advance fee: at ATM: 3%/$3 min.; at branch: 3%/$10 min.; by check: 3%/$5 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.4%.

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Columbus Bank & Trust • (800) 543-8227

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• Annual Fee : $25
• APR : 16.4% (Var)
• Additional Information : Cash advance fee: 2%/$2 min./$50 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.9%.

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Sanwa Bank of California • (800) 826-6894

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• Annual Fee : $15
• APR : 17.25% (Fix)
• Additional Information : Cash advance fee: 2%/$2 min./no max. Late fee: $5. No over the limit fee.

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Sumitomo Bank of California • (800) 675-8009

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• Annual Fee : $18
• APR : 17.25% (Var)
• Additional Information : Cash advance fee: 2%/$5 min. Late fee: $5. No over the limit fee. APR is Prime + 9%.

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Wells Fargo Bank • (800) 642-4720

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Proven Credit Card

• Annual Fee : $18
• APR : 17.9% (Var)
• Additional Information : Cash advance fee: at ATM: 3%/$3 min.; at branch: 3%/$10 min.; by check: 3%/$5 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 9.4%.

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Sumitomo Bank of California • (800) 675-8009

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• Annual Fee : $15
• APR : 19.8% (Fix)
• Additional Information : Cash advance fee: 2%/$5 min. Late fee: $5. No over the limit fee.

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Union Bank of California • (800) 542-6034

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• Annual Fee : $15
• APR : 19.8% (Fix)
• Additional Information : Cash advance fee: 2%. Late fee: $8. No over the limit fee. (Available only in CA, OR & WA.)

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M&T Bank • (800) 845-2987

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Classic

• Annual Fee : $20
• APR : 19.8% (Fix)
• Additional Information : Cash advance fee: $1. Late fee: $15. Over the limit fee: $15. Annual fee waived first two years.

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Wells Fargo Bank • (800) 642-4720

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Classic

• Annual Fee : $18
• APR : 20.05% (Var)
• Additional Information : Cash advance fee: at ATM: 3%/$3 min.; at branch: 3%/$10 min.; by check: 3%/$5 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 11.55%.

 

Watch out for credit card fees

Late fees have climbed 26% since 1995

While fierce competition for credit-worthy customers, plus low interest rates, are keeping rates down on credit cards-as low as 8.5%-many banks are scrambling to squeeze money out of their cardholders by increasing old fees and creating new ones.

Consumer Action's 1997 Annual Credit Card Survey, contained in this issue, reveals that credit card fees have risen substantially in the past two years, accompanied by outrageous new anti-consumer practices. While many cardholders are paying off their balances in full each month and paying no annual or other fees, others are being charged record-high late fees, cash advance fees and over the credit limit fees—plus brand new, penalty-type finance charges.

"Consumers had better read their card agreements carefully, especially any notice they receive of changes in practices," warned Ken McEldowney, CA executive director. "If you don't, you may get hit with a late fee or a higher interest rate—or even a fee that penalizes you for paying off your balance on time."

In May and June, CA surveyed 100 standard credit cards from 68 banks and found interest rates as high as 21.4% (Crestar Bank), with 52 cards at 15% and below. Fifty-seven of the cards do not have annual fees, and most have variable interest rates tied to the prime lending rate.

These results, showing an average interest rate of 14.87%, were comparable to CA's 1995 survey, which recorded an average interest rate of 15.4%. But when CA compared fees from 1995 to 1997, the results were staggering: the average late fee has jumped from $13 to $16.50—a 26% increase in just two years.

"In 1995, no one we surveyed charged more than $18 as a late fee," said Linda Sherry, CA editorial director. "But now 46 cards have late fees of $20 or more."

Even one day late

In addition, warned Sherry, many banks now assess late fees much earlier than they ever did before. Late fees may not have been a major concern to cardholders in the past, because banks have waited anywhere from a few to 30 days past the due date before recording a late fee. But now some credit card companies, including AT&T Universal Card, MBNA America and Citibank, have begun to charge late fees sooner—in some cases when the payment is only one day late.

"The combination of higher late fees and a shorter leniency period is not a good one for cardholders," noted Sherry. "Even people who make timely payments could be hit with a late fee if their payment was delayed in the mail."

CA sees this as part of an industry-wide approach to "penalize" consumers who get behind with payments. The credit card industry has repeatedly pointed to rising levels of consumer debt, credit delinquencies and personal bankruptcy as reasons for strict new policies.

Recent examples of penalty rate provisions include:

• Chase Manhattan Bank—"Account must remain in good standing... otherwise both purchase and cash advance APR are the Prime Rate plus 12.9%, currently 21.15%." (Non-penalty rate: 17.9%.)
• Discover Card—"If two consecutive payments are not made on time the rate increases to Prime Rate plus 13.9%, currently 22.15%." (Non-penalty rate: 17.4%.)
• Wells Fargo Bank—"If your account is not in good standing, the APR on your entire balance may convert to a fixed rate of 23.9%." (Non-penalty rates: 12.5%-20.5%.)

Other fees also increase

Higher charges are also being assessed for over the limit fees. (These fees may be charged each month that your balance exceeds your credit limit.) Two years ago, CA found only one bank charging $20. This year, 43 cards had over the credit limit fees of $20, while four would hit cardholders with $25.

The practice of charging for cash advances also has taken an anti-consumer turn. In 1995, average charges were 2.2% of the amount advanced, with an average maximum limit on the fee of $17. By 1997, the average fee jumped to 2.3%—a 5.5% increase—and the average maximum to $19.93, up 17%.

More disturbing to CA is the introduction of new kinds of charges, which seem designed to get as many cardholders as possible to pay more in fees. One of the most outrageous examples, said Sherry, is Advanta, a credit card company that markets its cards only by direct mail invitation and therefore is not included in CA's survey. Advanta recently notified customers that it may impose several new fees, including a $15 charge for every six-month period in which the card isn't used and a $25 fee when the account is closed.

In 1997, several banks said they will assess an annual fee on so-called "inactive accounts" or waive existing annual fees if customers meet certain use requirements. NationsBank said it would charge a $19 annual fee if the card is not used at least three times per year. Columbus Bank & Trust will waive its $25 annual fee if the card is used at least six times a year. Sanwa Bank of California will waive its $15 fee if you make at least $500 in purchases during the year, while Republic National Bank and Union Bank of California require at least $3,000 in purchases to avoid their annual fees of $18 and $24.

(Banks estimate that inactive credit card accounts cost them $20 per year to maintain.)

Other banks have come up with new fees for customers who use cards for convenience and perks—and don't carry a balance. Currently, about 40% of all cardholders pay their debts in full each month. Last year, the GE Rewards Card began to charge a $25 annual fee to customers who do not pay at least $25 in interest annually. Chase Manhattan Bank lowers the interest rate on its gold card by two percentage points if cardholders carry a balance of $2,500 or more.

"Credit card companies love cardholders who carry a balance and make only the minimum monthly payments," noted Sherry. "That's where they make steady income. All other cardholders are fair game for new and ever more creative charges."

 

Keep credit card costs in check

Cardholders have to watch out for changes in policies and rates. These are usually announced via "bill stuffers." Be alert for the words: "Important Notice of Change in Terms."

Late fees: Many cards now require that monthly payments arrive "on or before" the due date. If you mail your payment just a day or two late, you could be charged a late fee.

Interest charges on late payments: Even if you pay your balance in full each month, you might incur interest charges if your payment is late.

Over the limit fees: Many cardholders assume that when they get too close to their credit limit the charge will be denied. This isn't true in all cases—you may be allowed to go over your credit limit and be charged a fee for doing it. You'll be charged that fee every month until you bring the balance within your credit limit.

Bounced check fees: Many issuers charge a fee of $20 or more if your check is returned. You pay it in addition to whatever overdraft fee your own bank charges.

The penalty rate increase: When you are late with your payment for even one month, you may find that your interest rate jumps. This is usually spelled out in the fine print of a card offer, but you might miss it in a bill stuffer.

The "we believe you are overextended" rate increase: Capitol One became infamous in 1995 when it drastically increased the interest rates of some customers following a credit check. Were these people late with their payments to Capital One? No, and in most cases their credit reports did not show late payments on other credit accounts, either, but they had one thing in common: they were close to or at the credit limit on most of their cards.

Cash advance fees: If you are considering transferring a balance to a lower rate credit card, make sure that your new card won't charge you a cash advance fee. Before you apply for the card, ask if there is a fee for balance transfers.