1998-1999 Credit Card Survey

 

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.

Table of Contents


The 10 lowest rate cards with annual fees found in CA's survey

Bank Fees APR* Phone
Pulaski Bank & Trust $35 7.99% (800) 980-2265
Wachovia Bank (Prime for Life) $88 8.50% (800) 241-7990
Huntington National Bank (Prime Preferred Standard) $39 9.50% (800) 480-BANK
Great Falls Bank $15 9.60% (973) 942-1111
Simmons First National Bank $35 9.90% (800) 636-5151
Metropolitan National Bank $25 9.96% (800) 883-2511
Atlantic Stewardship Bank $15 10.99% (201) 444-7100
AFBA Industrial Bank $35 11.00% (800) 776-2265
Amalgamated Bank of Chicago $37 11.25% (800) 723-0303
First Union National Bank (Low Rate Option) $39 11.40% (800) 377-3404

* APR = Annual percentage rate

The 10 lowest rate cards with NO annual fees found in CA survey

Bank APR* Phone
Astoria Federal Savings Bank 9.90% (800) 955-9900
AFBA Industrial Bank 11.40% (800) 776-2265
Bank of Canton 11.50% (415) 362-4100
Union Federal Savings Bank 11.90% (800) 242-9910
Pullman Bank (Privileges Classic) 12.50% (800) 785-5626
Star Bank - Platinum 13.20% (800) 999-0619
Union State Bank 13.40% (800) 887-8775
PNC National Bank (Member Select Classic Card) 13.49% (888) 222-5790
Liberty Savings Bank,
Metropolitan Bank & Trust,
People's Bank
All at 13.90% (800) 285-7365
(800) 837-6058
(800) 426-1114
Amtrust Bank 14.40% (888) 268-7878

* APR = Annual percentage rate

1998 Credit Card Survey

You are prohibited from using Consumer Action's name or any reference to its surveys in advertising or for any other 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 after the close of the last billing cycle 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 often carry a higher APR.

Notes:

* Survey conducted during August-September 1998.

* Survey does not include teaser rates. (See list of teaser rates available at the time of the survey.)

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


AFBA Industrial Bank • (800) 776-2265


Standard Card #1

  • Annual Fee : $35
  • APR : 11% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $15. No over the limit fee. APR is Prime + 2.5%.

Standard Card #2

  • Annual Fee : none
  • APR : 11.40% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $15. No over the limit fee. APR is Prime + 2.9%.

Amalgamated Bank of Chicago • (800) 723-0303


Standard Card #1

  • Annual Fee : $37
  • APR : 11.25% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$30 max. Late fee: $15. Over the limit fee: $10. APR is Prime + 2.75%.

Standard Card #2

  • Annual Fee : none
  • APR : 14.5% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$30 max. Late fee: $15. Over the limit fee: $10. APR is Prime + 6%.

American Express • (800) 962-7227


Optima

  • Annual Fee : None
  • APR : 16.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2.50 min./$20 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.9%.

Amtrust Bank • (888) 268-7878


Standard Card #1

  • Annual Fee : $18
  • APR : 12.25% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 3.75%.

Standard Card #2

  • Annual Fee : none
  • APR : 14.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 5.9%.

Standard Card #3

  • Annual Fee : none
  • APR : 14.75% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $15. Over the limit fee: $15.

Astoria Federal Savings Bank • (800) 955-9900


  • Annual Fee : None
  • APR : 9.9% (Var)
  • Additional Information : Cash advance fee: 2%/$10 min./$20 max. Late fee: $29. Over the limit fee: $25. APR is Prime + 1.4%.

AT&T Universal Card • (800) 662-7759


  • Annual Fee : None
  • APR : 15.8% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$20 max. Late fee: $25. Over the limit fee: $25. APR is Commercial Paper Rate + 10.3%.

Atlantic Stewardship Bank • (201) 444-7100


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

Banco Popular • (888) 311-7451


Standard Card #1

  • Annual Fee : None
  • APR : 18.15% (Var)
  • Additional Information : Cash advance fee: 2%/$4 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 9.65%.

Standard Card #2

  • Annual Fee : $20
  • APR : 16.05% (Var)
  • Additional Information : Cash advance fee: 2%/$4 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.55%.

Bank of America • (800) 200-7119


Standard Card

  • Annual Fee : None
  • APR : 15.49% (Var)
  • Additional Information : Cash advance fee: 2.5%/$20 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 6.99%.

Rewards Card

  • Annual Fee : None
  • APR : 17.49% (Var)
  • Additional Information : Grace period: 20 days. Cash advance fee: 3%/$20 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 8.99%.

Travel Choices

  • Annual Fee : $25
  • APR : 17.49% (Var)
  • Additional Information : Grace period: 20 days. Cash advance fee: 3%/$20 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 8.99%.

Bank of Canton • (415) 362-4100


Standard Card

  • Annual Fee : None
  • APR : 11.50% (Fix)
  • Additional Information : Cash advance fee: 2%/$2 min. Late fee: $5. Over the limit fee: $10. Available only to CA residents.

Bank One • (800) 945-2006


Standard Card

  • Annual Fee : None
  • APR : 9.99%-16.9% (Fix) (Fix)
  • Additional Information : Cash advance fee: 2%/$10 min./no max. Late fee: $29. Over the limit fee: $29.

BankBoston • (800) 788-5000


Standard Card

  • Annual Fee : None
  • APR : 16.4% (Var)
  • Additional Information : Cash advance fee: 2.5%/$3.50 min. Late fee: $22.50. Over the limit fee: $22.50. APR is Prime + 7.9%.

BankBoston #2

  • Annual Fee : $18
  • APR : 12.25% (Var)
  • Additional Information : Cash advance fee: 2.5%/$3.50 min. Late fee: $22.50. Over the limit fee: $22.50. APR is Prime + 3.75%.

Central Carolina Bank • (800) 334-1073


Standard Card #1

  • Annual Fee : $20
  • APR : 12% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$25 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 3.5%

Standard Card #2

  • Annual Fee : None
  • APR : 14.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$25 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 5.9%.

Chase Manhattan Bank • (800) 724-7819


  • Annual Fee : None
  • APR : 17.90% (Var)
  • Additional Information : Cash advance fee: 3%/$3 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 9.4%.

Citibank • (800) 950-5114


Classic

  • Annual Fee : None
  • APR : 17.9% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee: 2.5%/$2 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 9.4%.

Citizens Bank • (800) 438-9222


Standarf Card

  • Annual Fee : None
  • APR : 15.65% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.15%.

Good Citizen Card

  • Annual Fee : None
  • APR : 16.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.9%. With every purchase bank makes a 25¢ contribution to a charity of your choice-up to $100 per year.

Citizens-Union Savings Bank • (800) 847-7378


  • Annual Fee : None
  • APR : 18.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2min. Late fee: $25. Over the limit fee: $25. APR is Prime + 9.9%.

Columbus Bank & Trust • (800) 543-8227


  • Annual Fee : $25
  • APR : 16.40% (Var)
  • Additional Information : Cash advance fee: 2%/$50 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.9%. Annual fee waived if card used 6 times per year.

Comerica Bank • (800) 292-1300


Standard Card

  • Annual Fee : None
  • APR : 16.75% (Fix)
  • Additional Information : Cash advance fee: 2.5%/$2.50 min./$20 max. Late fee: $29. Over the limit fee: $29.

Comerica Bank #2

  • Annual Fee : None
  • APR : 16.20% (Var)
  • Additional Information : Cash advance fee: 2.5%/$2.50 min./$20 max. Late fee: $29. Over the limit fee: $29. APR is LIBOR (5.69% during survey) + 10.5%.

Commerce Bank • (800) 937-2000


  • Annual Fee : None
  • APR : 16% (Fix)
  • Additional Information : No cash advance fee. Late fee: 5%/$5 max. Over the limit fee: $5. Available only in NJ, PA, & DE.

Community National Bank • (609) 869-7900


  • 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 amount over limit.

Crestar Bank • (800) 368-7700


  • Annual Fee : None
  • APR : 16.4%, 18.4%, or 21.4% (Var)
  • Additional Information : Cash advance fee: 2.5%/$2.50 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.9%, 9.9%, or 12.9%, depending on creditworthiness.

Dime Savings Bank of New York • (800) 847-7378


Standard Card #1

  • Annual Fee : None
  • APR : 17.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 8.9%.

Standard Card #2

  • Annual Fee : None
  • APR : 18.9% (Fix)
  • Additional Information : Cash advance fee: 2%/$2 min. Late fee: $25. Over the limit fee: $25.

Emigrant Savings • (800) 847-7378


  • Annual Fee : None
  • APR : 17.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 8.9%.

Fall River Five Cents Savings Bank • (800) 426-1114


  • Annual Fee : None
  • APR : 14.9% (Fix)
  • Additional Information : Cash advance fee: 2%/$3 min./$25 max. Late fee: $25. Over the limit fee: $25.

FCC National Bank • (800) 368-4535


  • Annual Fee : None
  • APR : 18.4% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee: 2.5%/$2.50 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 9.9%.

Fidelity National Bank • (800) 753-2900


Classic

  • Annual Fee : None
  • APR : 14.9% (Fix)
  • Additional Information : Grace period: 23 days. Cash advance fee: 4%/$5 min. Late fee: $20. Over the limit fee: $20.

First Consumers National Bank • (800) 876-3262


Standard Card

  • Annual Fee : $20
  • APR : 19% (Var)
  • Additional Information : Grace period: 30 days on average. Cash advance fee: 2%/$2.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 10.5%.

Eddie Bauer Card

  • Annual Fee : None
  • APR : 14.9% (Fix)
  • Additional Information : Cash advance fee: 2%/$2.50 min. Late fee: $20. Over the limit fee: $20.

Spiegel Card

  • Annual Fee : None
  • APR : 17.9% (Fix)
  • Additional Information : Cash advance fee: 2%/$2.50 min. Late fee: $20. Over the limit fee: $20.

First National Bank of South Dakota • (800) 688-7070


  • Annual Fee : None
  • APR : 17.66% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min. Late fee: $25. Over the limit fee: $25. APR is LIBOR (5.69% during survey) + 12%.

First Union Bank • (800)377-3404


Low Rate Option

  • Annual Fee : $39
  • APR : 11.40% (Var)
  • Additional Information : Cash advance fee: 2.95%/$2.95 min./no max. Late fee: $29. Over the limit fee: $29. APR is Prime + 2.9%.

Prime Option

  • Annual Fee : $20
  • APR : 14.40% (Var)
  • Additional Information : Cash advance fee: 2.95%/$2.95 min./no max. Late fee: $29. Over the limit fee: $29. APR is Prime + 5.9%.

First USA Bank • (800) 537-6954


  • Annual Fee : None
  • APR : 12.99% - 16.99% (Fix)
  • Additional Information : Grace period: 20-25 days. Cash advance fee: 2%/$10 min./$20 max. Late fee: $29. Over the limit fee: $29.

First Virginia Bank • (800) 634-8803


  • Annual Fee : None
  • APR : 14.7% (Fix)
  • Additional Information : Cash advance fee: 2%/$2 min./$20 max. Late fee: $25. Over the limit fee: $25.

First Western Bank • (800) 545-7899


  • Annual Fee : None
  • APR : 18.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min. Check advances: 1%/$2 min./$10 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 9.9%.

Fleet Bank (a.k.a Norwest Bank) • (800) 225-5353


  • Annual Fee : $20
  • APR : 17.7% (Var)
  • Additional Information : Cash advance fee: 2.5%/$3 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 9.2%.

GE Rewards • (800) 437-3927


Standard Card

  • Annual Fee : None
  • APR : 17.4% (Var)
  • Additional Information : Cash advance fee: 2.5%-4%/$2-$5 min. Late fee: $29. Over the limit fee: $25. APR is Prime + 8.9%. (Card offers 2% rebate on purchases.)

Select

  • Annual Fee : None
  • APR : 18.8% (Var)
  • Additional Information : Cash advance fee: 2.5%-4%/$2-$5 min. Late fee: $29. Over the limit fee: $25. APR is LIBOR (5.69% during survey) + 12.49%.

Great Falls Bank • (973) 942-1111


  • Annual Fee : $15
  • APR : 9.6% (Fix)
  • Additional Information : Cash advance fee: 2%/$2 min./$25 max. Late fee: $20. Over the limit fee: $20. Available only in NJ.

Greenwood Trust Co. • (800) 474-2273


Cash Back Bonus Private Issue Card

  • Annual Fee : $18
  • APR : 18.4% (Var)
  • Additional Information : Cash advance fee: 2.5%/$2 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 9.9%.

Interest Rebate Private Issue Card

  • Annual Fee : None
  • APR : 18.4% (Var)
  • Additional Information : Cash advance fee: 2.5%/$2 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 9.9%.

Rate Advantage Private Issue Card

  • Annual Fee : None
  • APR : 15.4% (Var)
  • Additional Information : Cash advance fee: 2.5%/$2 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 6.9%.

Discover Card • (800) 347-2683

  • Annual Fee : None
  • APR : 19.8% (Var)
  • Additional Information : Cash advance fee: 2.5%/$2 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 11.3%.

Household Bank • (800) 477-6000


  • Annual Fee : None
  • APR : 15.9% (Var)
  • Additional Information : Cash advance fee: 4%/$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 7.4%.

Huntington National Bank • (800) 480-BANK


Prime Plus Standard Card

  • Annual Fee : None
  • APR : 16.40% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min. (Waived first 90 days). Late fee: $20. Over the limit fee: $20. APR is Prime + 7.9%.

Prime Preferred Standard Card

  • Annual Fee : $39
  • APR : 9.50% (Var)
  • Additional Information : Terms same as above. APR is Prime + 1%.

Interchange State Bank • (201) 703-2265


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

Key Bank • (800) 539-2968


Key Smart Classic Card

  • Annual Fee : $20
  • APR : 10.9% to 16.9% (Fix)
  • Additional Information : Cash advance fee: 2%/$2.50 min./$25 max. Late fee: $25. Over the limit fee: $25.

Key Smart Classic Card (no fee)

  • Annual Fee : None
  • APR : 12.9% to 19.8% (Fix)
  • Additional Information : Cash advance fee: 2%/$2.50 min./$25 max. Late fee: $25. Over the limit fee: $25.

Liberty Savings Bank • (800) 285-7365


  • Annual Fee : None
  • APR : 13.90% (Fix)
  • Additional Information : No cash advance fee. Late fee: 5% of amount past due/$5 min. No over the limit fee.

M&T Bank • (800) 545-7899


Classic

  • Annual Fee : None
  • APR : 17.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 8.9%.

MBNA America Bank • (800) 441-9977


  • Annual Fee : None
  • APR : 17.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min. Late fee: $25. Over the limit fee: $25. APR is Prime +8.9%.

Mellon Bank • (800) 753-7011


Bank At Work Card

  • Annual Fee : None
  • APR : 15.4% (Var) (min. 12.9%)
  • Additional Information : Cash advance fee: 2%/$3 min./$20 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 6.9%.

Bank At Work with TravelReturns

  • Annual Fee : $35
  • APR : 16.4% (Var) (min. 13.9%)
  • Additional Information : Cash advance fee: 2%/$3 min./$20 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.9%.

Metropolitan Bank & Trust • (800) 837-6058


  • Annual Fee : None
  • APR : 13.9% (Fix)
  • Additional Information : No cash advance fee. Late fee: $10. Over the limit fee: $10.

Metropolitan National Bank • (800) 883-2511


  • 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%.

Metropolitan State Bank • (973) 882-0800


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

National City Bank • (800) 423-3883


  • Annual Fee : None
  • APR : 16.90% (Var)
  • Additional Information : Cash advance fee: 3%/$3 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 8.4%.

NationsBank - Classic • (800) 654-1899


  • Annual Fee : None
  • APR : Between 16.4% to 21.4% (Var)
  • Additional Information : Grace period: 20-30 days. Cash advance fee: 3%/$3 min. Late fee: $25. Over the limit fee: $25. APR tied to Prime. (APR based on applicant's credit.)

Oak Brook Bank • (800) 847-7378


Standard Card #1

  • Annual Fee : None
  • APR : 15.9% (Var)
  • Additional Information : Cash advance fee (using checks): 1%/$10 max. Cash advance fee (ATMs and banks): 2%. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.4%.

Standard Card #2<

  • Annual Fee : None
  • APR : 17.4% (Var)
  • Additional Information : Cash advance fee (using checks): 1%/$10 max. Cash advance fee (ATMs and banks): 2%. Late fee: $25. Over the limit fee: $25. APR is Prime + 8.9%

Ohio Savings Bank • (800) 987-6446


Classic Fixed Card

  • Annual Fee : None
  • APR : 14.75% (Fix)
  • Additional Information : Grace period: 30 days. No Cash advance fee. Late fee: $25. Over the limit fee: $25.

Classic Variable Card

  • Annual Fee : $18
  • APR : 12.25% (Var)
  • Additional Information : Grace period: 30 days. No Cash advance fee. Late fee: $25. Over the limit fee: $25.APR is Prime + 3.75%.

Prime Card

  • Annual Fee : None
  • APR : 14.40% (Var)
  • Additional Information : Grace period: 30 days. No Cash advance fee. Late fee: $25. Over the limit fee: $25. APR is Prime + 5.9%.

Orange County Federal Credit Union • (800) 274-3243


  • Annual Fee : None
  • APR : 14.4% (Var)
  • Additional Information : Cash advance fee: 2%/$20 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 5.9%.

BankBoston • (800) 445-4631


Partners First

  • Annual Fee : $18
  • APR : 14.4% (Var)
  • Additional Information : Cash advance fee: 2.5%/$3.50 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 5.9%.

Partners First - No fee

  • Annual Fee : None
  • APR : 16.4% (Var)
  • Additional Information : Cash advance fee: 2.5%/$3.50 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.9%.

People's Bank • (800) 426-1114


  • Annual Fee : None
  • APR : 13.9% (Fix)
  • Additional Information : Cash advance fee: 2%/$25 max. Late fee: $25. Over the limit fee: $25.

PNC National Bank • (888) 222-5790


Member Select Classic Card (AAA)

  • Annual Fee : None
  • APR : 13.49% (Var)
  • Additional Information : Grace period: 20 days. Cash advance fee: 2.5%/$3.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 4.99%.

Travel Rewards Card

  • Annual Fee : $30
  • APR : 16.49% (Var.)
  • Additional Information : Grace period: 20 days. Cash advance fee: 2.5%/$3.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.99%.

Pulaski Bank & Trust • (800) 980-2265


  • Annual Fee : $35
  • APR : 7.99% (Var)
  • Additional Information : Grace period: 20 days. No cash advance fee. Late fee: $20. Over the limit fee: $20. Annual fee is $25 for AR residents. APR is Federal Discount Rate + 5%.

Pullman Bank • (800) 785-5626


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%.

Privileges Classic

  • Annual Fee : None
  • APR : 12.5% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min/ $20 max. Late fee: $10. Over the limit fee: $10. APR is Prime + 4%.

Republic National Bank • (800) 533-5008


Standard Card #1

  • Annual Fee : $18
  • APR : 11.4% (Var)
  • Additional Information : Cash advance fee: 3%/$3 min./$10 max. Late fee: $15. Over credit limit fee: $15. APR is Prime + 2.9%. No annual fee if purchases total $3,000 or more in the preceding year.

Standard Card #2

  • Annual Fee : None
  • APR : 16.4% (Var)
  • Additional Information : Cash advance fee: 3%/$3 min./$10 max. Late fee: $15. Over credit limit fee: $15. APR is Prime + 7.9%. No annual fee if purchases total $3,000 or more in the preceding year.

Sanwa Bank of California • (800) 826-6894


  • Annual Fee : $15
  • APR : 17.25% (Fix)
  • Additional Information : Cash advance fee: 2%/$2 min. Late fee: $7. No over the limit fee. Annual fee may be waived if you purchase more than $2500 in a year.

Security Savings Bank • (800) 573-6089


  • Annual Fee : None
  • APR : 14.49% (Var)
  • Additional Information : Cash advance fee: 2%. Late fee: $15. Over the limit fee: $15. APR is Prime + 5.99%.

Simmons First National • (800) 636-5151


  • Annual Fee : $35
  • APR : 9.9% (Var)
  • Additional Information : No cash advance fee. Late fee: $15. Over the limit fee: $10. (After first year over the limit fee imposed only if 10% over limit). APR is Federal Discount Rate + 5%. Annual fee is $25 for AR residents.

Star Bank • (800) 999-0619


Classic

  • Annual Fee : None
  • APR : 14.40% (Var)
  • Additional Information : Cash advance fee: 2%/no min./no max. max. Late fee: $20. Over the limit fee: $20. APR is Prime + 5.9%.

Platinum

  • Annual Fee : None
  • APR : 13.2% (Var)
  • Additional Information : Cash advance fee: 2%. Late fee: $20. Over the limit fee: $20. APR is Prime + 4.7%.

Sumitomo Bank of California • (415) 445-3969


Fixed Rate

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

Variable Rate

  • Annual Fee : $18
  • APR : 17.5% (Var)
  • Additional Information : Cash advance fee: 2%. Late fee: $5. No over the limit fee. APR is Prime + 9%.

SunTrust Bank • (800) 349-7438


  • Annual Fee : None
  • APR : 15.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$15 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 6.9%.

The Roslyn Savings Bank • (800) 545-7899


Platinum Plus

  • Annual Fee : None
  • APR : 15.9% (Var)
  • Additional Information : Cash advance fee (tellers and ATM): 2%/$2 min. Cash advances (checks): 1%/$2min./$10 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.4%.

Platinum Plus Miles Travel Rewards

  • Annual Fee : $35
  • APR : 15.9% (Var)
  • Additional Information : Cash advance fee (tellers and ATM): 2%/$2 min. Cash advances (checks): 1%/$2min./$10 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.4%

Preferred Card

  • Annual Fee : None
  • APR : 16.4% (Var)
  • Additional Information : Cash advance fee (tellers and ATM): 2%/$2 min. Cash advances (checks): 1%/$2min./$10 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.9%.

Travelers Bank • (800) 642-3981


Platinum

  • Annual Fee : None
  • APR : 14.6% (Var)
  • Additional Information : Grace period: 20 days. Cash advance fee: 2.50%/$2.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 5.9%.

Quicken Visa

  • Annual Fee : None
  • APR : 16.6% (Var)
  • Additional Information : Grace period: 20 days. Cash advance fee: 2.50%/$2.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.9%.

Quicken Visa - Traveler's Rewards

  • Annual Fee : $39
  • APR : 16.6% (Var)
  • Additional Information : Grace period: 20 days. Cash advance fee: 2.50%/$2.50 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 7.9%.

Union Federal Savings • (800) 242-9910


  • Annual Fee : None
  • APR : 11.9% (Fix)
  • Additional Information : Cash advance fee: 2%/$10 max. Late fee: $15. Over the limit fee: $20.

Union Planters National Bank • (800) 582-6231


Standard Card #1

  • Annual Fee : None
  • APR : 16.7% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$20 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 8.2%.

Standard Card #2

  • Annual Fee : $20
  • APR : 13% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$20 max. Late fee: $20. Over the limit fee: $20. APR is Prime + 4.5%.

Union State Bank • (800) 887-8775


  • Annual Fee : None
  • APR : 13.4% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $10. Over the limit fee: $20. APR is Prime + 4.9%.

US Bank • (800) 285-8585


Classic Card

  • Annual Fee : $20
  • APR : 17.4% (Var)
  • Additional Information : Cash advance fee: 3%/$2 min./$15 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 8.9%.

Preferred Visa Card

  • Annual Fee : None
  • APR : 15.4% (Var)
  • Additional Information : Cash advance fee: 3%/$2 min./$15 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 6.9%.

USAA Federal Savings Bank • (800) 922-9092


  • Annual Fee : None
  • APR : 12.4% to 18.4% (Var)
  • Additional Information : No Cash advance fee. Late fee: $20. Over the limit fee: $20. APR is based on Prime.

Wachovia Bank • (800) 241-7990


  • Annual Fee : None
  • APR : 15.4% (Var)
  • Additional Information : Cash advance fee: 4%/$5 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 6.9%.

Prime for Life Card

  • Annual Fee : $88
  • APR : 8.5% (Var)
  • Additional Information : Cash advance fee: 4%/$5 min. Late fee: $25. Over the limit fee: $25. APR is Prime Rate.

Washington Mutual Bank • (800) 803-0205


Frontier Visa

  • Annual Fee : None
  • APR : 12.25% (Var)
  • Additional Information : Cash advance fee: 3%/$3 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 3.75%.

Rebate Visa

  • Annual Fee : $18
  • APR : 19.4% (Var)
  • Additional Information : Cash advance fee: 3%/$3 min. Late fee: $20. Over the limit fee: $20. APR is Prime + 10.9%.

Wells Fargo Bank • (800) 642-4720


Preferred Proven Credit Standard Card

  • Annual Fee : $18
  • APR : 15.9% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee (ATM): 3%/$3 max. Cash advance fee (checks): 3%/$5 max. Cash advance fee (other sources): 3%/$10 max. Late fee: $29. Over the limit fee: $29. APR is Prime + 7.4%.

Premium Credit Standard Card

  • Annual Fee : $18
  • APR : 12.5% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee (ATM): 3%/$3 max. Cash advance fee (checks): 3%/$5 max. Cash advance fee (other sources): 3%/$10 max. Late fee: $29. Over the limit fee: $29. APR is Prime + 4%. This rate based on credit history.

Proven Credit Standard Card

  • Annual Fee : $18
  • APR : 17.9% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee (ATM): 3%/$3 max. Cash advance fee (checks): 3%/$5 max. Cash advance fee (other sources): 3%/$10 max. Late fee: $29. Over the limit fee: $29. APR is Prime + 9.4%.

Traditional Standard Card

  • Annual Fee : $18
  • APR : 20.05% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee (ATM): 3%/$3 max. Cash advance fee (checks): 3%/$5 max. Cash advance fee (other sources): 3%/$10 max. Late fee: $29. Over the limit fee: $29. APR is Prime + 11.55%. This rate is based on credit history.

About the survey:Card issuers try to bolster profits - users pick up the tab

The banking industry has taken several steps to sharply increase credit card income and push consumers deeper into debt, according a new credit card survey by Consumer Action (CA). (See full listing of all surveyed cards.)

In August and September, CA surveyed 117 cards from 74 banks, finding interest rates ranging from 7.99% (Pulaski Bank & Trust) to 21.4%, the rate charged some cardholders by Crestar Bank and NationsBank. (Since CA's survey, NationsBank has changed its name to Bank of America.) Seventy-five of the cards do not have annual fees and most have variable interest rates tied to the prime lending rate.

This year's average APR (annual percentage rate) on all cards is 15.25%-only slightly higher than in recent years. But the information collected by phone by CA establishes that banks have found other ways of sharply increasing their bottom line:

  • Increased use of penalty rates or default rates. These are higher rates imposed on cardholders whose payment is not received by the due date. Of 35 bankcards with penalty rate provisions, default APRs ranged from 16.25% to 24.95%, an average of 4.5 percentage points higher than their regular rates. (See chart)
  • Late fees have risen nearly 75% since 1995.


    Increased late fees. Using data from its 1995 credit card survey, CA compared late fees charged by 39 banks that were surveyed in both years. In 1995, late fees at these banks averaged $12.53. In 1998, the average has risen by nearly 75% to $21.82. Late fees at California banks have risen much more sharply over the three-year period, as the results of class action lawsuits that sought to cap bank fees have faded. Since 1995, Bank of America has increased its late fees from $7 to $25, and Wells Fargo from $5 to $29.
  • Increased "over the limit" fees. (These fees are charged each month that your balance exceeds your credit limit.) In 1995, CA found only one bank charging as much as $20. This year, 18 cards had over the credit limit fees of $20, while 31 levy $25 and 13 hit cardholders with $29.
  • Shortened grace periods. The standard grace period gives cardholders 25 days from the closing of a billing cycle to make a payment without additional interest. CA found nine banks that provide only a 20-day grace period-giving the cardholder just a few days to mail a payment.
  • Curtailed "leniency periods"-the time between the due date and when a payment can be received without incurring a late fee. Of 74 banks, 45 said they would impose late fees immediately if a cardholder's payment is not received by the due date. In the past, cardholders were given anywhere from 5-15 extra days to pay-a practice still honored by some banks. (See chart.)
  • Lowered minimum payments-the portion of any outstanding balance that is due in each billing cycle. Almost half the banks surveyed (35) only require a monthly minimum payment of 2% of the outstanding balance. The industry standard used to be 4%. Repaying a $2,000 balance on a 15% APR card would take two years longer if the cardholder paid 2% each month instead of 4% (6.58 years vs. 4.58 years). The added interest paid would be about $250.

"Banks are pulling out all stops in order to increase profits from fee income," said CA editorial director Linda Sherry who conducted this year's survey with CA staffers Lianni Lee and Nelson Santiago.

Annual reports of the nation's largest credit card banks confirm these trends. For example, Household Bank, the nation's second largest credit card issuer, states in its 1997 annual report: "In late '96...we began to tighten certain credit lines, reprice selected accounts and raise late fees."

"According to CA's surveys, not only did Household's late fees jump 93% to $29 since 1995, they have one of the highest penalty rates we surveyed, at 23.90%," said Sherry.

Other very high penalty rates found by CA include:

  • GE Capital Consumer Card Co. at 24.95% (non-penalty rates of 17.4% and 18.8%), with a late fee of $29.
  • Mellon Bank at 24.90% (non-penalty rate of 15.4%), with a late fee of $25.
  • FCC National Bank at 24.4% (non-penalty rate 18.4%), with a late fee of $29.
  • First Consumers National Bank at 24% (non-penalty rates of 14.9%-19%), with a late fee of $20.

"If you have a card with an introductory rate and you make a couple of late payments, your APR could jump 15 percentage points," said CA Executive Director Ken McEldowney. "We see plenty of direct solicitations with 4.9% teaser rates, but if you're not careful, you can get zapped with a penalty rate of close to 25%."

Tricky tactics put credit cardholders on the defensive

Credit card issuers seem to come up with new angles every day to make money off cardholders. Even if you pride yourself on being a savvy consumer, there may be something in their bag of tricks you haven't heard of:

  1. Watch for changes in policies and rates. These are usually announced via "bill stuffers." Be alert for the words: "Important Notice of Change in Terms."

    For example, recently Wells Fargo Bank raised its late fee from $25 to $29, American Express Optima announced it was cutting back its 30-day grace period to 25 days and Household Bank increased its penalty rate to 23.90%.

  2. Late fees: Many cards now require that monthly payments arrive "on or before" the due date. If your payment arrives just a day or two late, you could be charged a late fee of $25 or $29.
  3. 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.
  4. The penalty rate increase: When you are late with your payment for even one month, your interest rate may jump. This is usually spelled out in the fine print of a card offer, but you might miss it in a bill stuffer.
  5. Temporary "teaser" rates are flaunted in giant-sized type, but you have to read the itty-bitty type to discover the non-introductory rate.
  6. Even "fixed" interest rates aren't fixed. Card companies can increase the annual percentage rate (APR) with a mere 15 days notice.
  7. When you've transferred a balance from another card to take advantage of a low rate on balance transfers, card issuers can first apply your payments to the low-rate portion of your balance, rather than the high rate portion. This costs you more in the long run because your overall balance compounds at a higher interest rate.
  8. 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.
  9. Balance transfers don't always trigger cash advance fees, but they begin accruing interest the day they are posted to the card, whether or not you carry a balance.
  10. 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 as high as $29 for doing it. You'll be charged that fee every month until you bring the balance within your credit limit.
  11. Bounced check fees: Many issuers charge a fee of $20 or more if your check is returned. You pay it in addition to the fee your own bank charges.
  12. Ask your bank if rate increases are tied to anything besides your payment history. With some banks, just being close to or at the credit limit on your other credit card accounts merits a big rate increase.
  13. With a growing number of cards, the interest rate for cash advances is higher-sometimes a lot higher. Capitol One's "Fixed Rate Card" with a 9.9% APR on purchases charges 19.8% on cash advances.

    (This is not the only cost associated with cash advances-they have up-front fees of 2-4% of the amount borrowed and begin accruing interest immediately, even if you pay your balance in full every month.)

  14. Those checks that your credit card company likes to send seem convenient, but using them is the same as taking a cash advance-immediate interest charges accrue and a higher cash advance rate may apply.
  15. For purchases you make in other countries, most credit cards charge a currency "conversion fee" of about 1%. However, Providian Bank recently notified its cardholders that it charges 5%. Traditionally, consumers traveling in other countries could save money by using their credit cards instead of exchanging currency. But credit cards convert purchases at a wholesale rate, less the traditional 1% fee. If other banks follow Providian's lead, using credit cards abroad won't be such a good deal.
  16. Mergers can spell trouble for card users because banks can change rates and term agreements simply by notifying the cardholder. If your bank is merging, watch your rate closely-by using the card or paying your bill you accept the rate increase. Recently, customers of Colonial National Bank had their rates increased by Advanta and Bank of NY customers got higher rates from Associates National Bank.
  17. If you use a card that gives you cash rebates or airline mileage, check on its policy about late payments. Most of these "reward" cards do not credit the rebate or miles in any month that a cardholder pays late.
  18. If you don't like something about your account, ask if it can be changed. Many banks will give good customers an interest rate reduction if they ask. If your due date proves to be inconvenient, most banks will honor your request to change it by a few days for future billing periods.
  19. Banks are creative in finding reasons to increase your rate. One consumer whose Chevy Chase card increased from 11.9% to 19.9% was told it could have been triggered by several things, including "too few bank promotional inquiries on the account." The bank did not appear to know that when credit reports are "prescreened" prior to a promotional offer, credit bureaus are not allowed to reveal prescreening inquiries to other creditors. She challenged the bank, but it would not lower her rate again, so she closed the account.

Late fees & penalty rates - a failproof recipe for increasing cardholders' debt

In an apparent effort to make up for declining profits, many banks are hitting customers with late fees the day after the due date and, after one or two late payments, increasing their interest rates to 20% and beyond to punish them.

At the same time, banks are encouraging cardholders to pay only 2% of their outstanding balances every month. Combining low minimum payments with more frequent-and larger-late fees plus punishing rate increases-aptly called "penalty rates"-is a recipe for increasing debt and personal bankruptcies.

In its new survey, CA found that it can be difficult to get out from under a penalty interest rate once you've been hit with one. Most banks surveyed will not decrease the cardholder's penalty rate until after six months-or even one year-of timely payments.

Costly mistakes

To show how damaging it can be for someone trapped in a cycle of late fees and penalty rates, CA calculated approximately how much it would cost a hypothetical cardholder who carried a $2,000 balance, paid only the 2% minimum payment and did not meet the due date three times in six months.

The cardholder's payments were not on time in the second and third billing cycles, which led to two late fees ($25 each) and an increase in the cardholder's interest rate from 13% to 24%. In the sixth billing cycle, the cardholder paid late again, incurring another $25 late fee. By the end of six months, the cardholder's $2,000 balance had increased by $76 and he had paid $277 in interest and late fees.

A captive cardholder

This cardholder's 2% minimum payments each month were roughly the same as the increased interest charges-$40 per month. As long as the balance was subject to a 24% penalty rate and he continued to pay only the 2% minimum each month, this hapless cardholder would never reduce the original debt. His payments would go only to cover finance charges and fees.

Many cardholders with decent credit have the option of transferring their debt to a lower rate card. But once a cardholder has late payments on his or her record, this option all but disappears. Not only do late payments lead to the trap of increased rates, they also affect your credit history and make it unlikely that you can get another card.

Banks with leniency periods

According to representatives of the following banks, customers may be allowed a "leniency period" of 3-15 days after the due date for their payments to arrive before the bank charges a late fee. All other surveyed banks said they will impose a late fee if the minimum payment is not received by the due date. (This information is provided as a guide only-banks change their policies frequently.)

Bank Period
AFBA Industrial Bank 10 days
Amalgamated Bank of Chicago 15 days
Banco Popular 3-5 days
Central Carolina Bank 10 days
Comerica Bank 3 days
Commerce Bank 5 days
Crestar Bank 15 days
Emigrant Savings Bank 10 days
Fidelity National Bank 5 days
First Consumers National Bank 10 days
First National Bank of South Dakota 6 days
First Virginia Bank 6-7 days
First Western Bank 10 days
Huntington National Bank 10 days
Interchange State Bank (No late fee)
Liberty Savings Bank 6 days
Metropolitan Bank & Trust 10 days
Metropolitan State Bank (No late fee)
Metropolitan National Bank 10 days
Oak Brook Bank 10 days
Ohio Savings Bank 15 days
Orange Co. Federal Credit Union 5 days
Pulaski Bank & Trust 5 days
Pullman Bank 10 days
Sanwa Bank of California 5 days
Security Savings Bank 5 days
Star Bank 5 days
Sumitomo Bank of California 5 days
Union Federal Savings Bank 14 days
USAA Federal Savings Bank 15 days

'Penalty Rates' punish your wallet

Bank 'Penalty Rates'
Bank Penalty Rate
GE Rewards 24.95%
Mellon Bank 24.90%
FCC National Bank 24.40%
First Consumers National Bank 24.00%
Household Bank 23.90%
Wells Fargo Bank 23.90%
Washington Mutual Bank 23.40%
Astoria Federal Savings Bank 22.99%
Bank One 22.99%
First USA Bank 22.99%
AT&T Universal Card 22.80%
American Express Optima 22.49%
Greenwood Trust Co. - Private Issue Card 22.40%
Greenwood Trust Co. - Discover Card 22.40%
NationsBank *22.40%
National City Bank 21.90%
Partners First (BankBoston) 21.90%
First National Bank of SD 21.66%
Travelers Bank 21.60%
Bank of America 21.49%
Chase Manhattan Bank 21.40%
Citibank Classic 21.40%
Wachovia Bank 21.24%
Citizens Bank 21.00%
Fleet Bank 20.50%
Star Bank 20.50%
Columbus Bank & Trust 20.40%
Crestar Bank 19.95%
BankBoston 19.90%
Fall River 5¢ Savings Bank 19.80%
People's Bank 19.80%
Huntington National Bank 19.40%
Fidelity National Bank 18.90%
Central Carolina Bank 17.88%
Washington Mutual Bank - Frontier Visa 16.25%

*Average non-introductory APR + 4%. May be higher or lower depending on cardholder's APR.

Banks tempt new customers with introductory 'teaser' rates

Many banks offer new customers introductory interest rates, known as "teaser rates," which typically last six months. Of the banks Consumer Action surveyed, 39 said a special offer was available to new customers. Unless otherwise noted, all teaser rates last for six months, and apply to transferred balances and new purchases. Lower rates may be offered by direct mail to a list of prescreened potential customers.

Bank Teaser Rates

Key:
a - Interest rate is good on balance transfers only.
b - Available only to customers who bank at the institution.
c - Particular rate dependent on applicant's creditworthiness.
d - Teaser rate lasts five months.

Bank Teaser Rate Notes
AFBA Industrial Bank 8.50%  
American Express Optima 7.90%  
Amtrust Bank 6.90%  
AT&T Universal Card 7.90% a
Bank of America 5.90% or 6.90% b
Bank One 6.90%  
BankBoston 6.90%  
Chase Manhattan Bank 5.90% or 6.90% b
Citizens Bank 5.90%  
Citizens Bank - Good Citizen Card 7.90%  
Citizens-Union Savings Bank 5.90% a, d
Columbus Bank & Trust 9.90%  
Commerce Bank 8.90%  
Crestar Bank 5.90% a
Dime Savings Bank of New York 5.90% a, d
Emigrant Savings Bank 5.90% a, d
Fidelity National Bank - Classic 7.90%  
First Consumers National Bank 6.99%  
First National Bank of South Dakota 5.90%  
First Union National Bank - Low Rate Option 9.90% a
First USA Bank 6.90%  
First Western Bank 5.90% a, d
Fleet Bank 9.90% b
GE Select 7.90% c
Huntington National Bank - Prime Plus 9.50%  
Mellon Bank - Bank at Work 7.90%  
M&T Bank - Classic 5.90% a, d
MBNA America 5.90% a, d
National City Bank 6.90%  
NationsBank 5.90% a
Oak Brook Bank 5.90% a, d
Ohio Savings Bank 6.90%  
Partners First (BankBoston) 6.90%  
Republic National Bank 7.90%  
Roslyn Savings Bank 5.90% a, d
Security Savings Bank 8.69% a
SunTrust Bank 6.90%  
Travelers Bank 6.90% a
Union State Bank 7.90% (1 year)
US Bank 6.50%  
Washington Mutual Bank - Frontier Visa 8.50%  
Washington Mutual Bank - Rebate Visa 8.90%  

Weed out your high interest rate department store cards

If you use retailers' credit cards for your holiday shopping, you may be paying a much higher price for credit than you realize.

Retailers do about 40% of their sales in the last quarter of the year, and in half those transactions customers pay with plastic. "We want to alert holiday shoppers to the price they pay for using retail credit cards," said CA's Ken McEldowney, noting that the organization found standard store cards with rates as high at 22.8%. "If you charged a $350 jacket on that card and paid only the minimum payment due each month, it would cost about $423 including interest-and take more than two years to pay for."

'Instant credit' temptation : Sales staff push offers of "instant credit" and discounts but don't mention interest rates or other key terms.

Salespeople are trained to push retail credit cards with tempting offers of "instant credit" and immediate 10-15% discounts without any mention of interest rates and other key terms. When CA sent a "secret shopper" to retail chains in the San Francisco Bay Area during October, many sales assistants were unable to tell the shopper what the annual percentage rate on the store's cards was.

Shoppers who want to look before they leap may be frustrated when they try to obtain interest rate information on the phone. CA found that when you call toll-free numbers provided by the stores, the first thing you are asked is to enter your account number.

Retailers issue credit cards in several ways. Large national retailers often use nationally-chartered banks that are situated in states that have no limits on interest rates. Under federal law, such banks are subject only to the laws of the states in which they are incorporated, and may charge whatever rates they choose to cardholders in other states.

Stores with in-house retail cards must comply with the laws of the states in which their customers live. With such cards, customers in unregulated states may end up subsidizing the purchases of others in states with strict interest rate ceilings.

Credit insurance

Many store card applications offer insurance services that promise to pay your account when you are unemployed, become disabled or when you die. Many insurance experts believe this optional add-on service is unecessary. It is also one of the most expensive forms of insurance protection, at an average cost of 60¢ for each $100 of your balance. The premiums are billed automatically on the card, increasing your payment each month or your balance if not paid immediately.

According to the Consumer Federation of America (CFA), credit insurance is a bad deal. (Credit insurance is also sold in connection with bank cards and loans.) CFA suggests that credit life insurance be considered only by some seniors and the seriously ill, who lack other life insurance protection or adequate financial assets and who want their bills to be paid off when they die.

Jean Ann Fox of CFA cautions retail card applicants not to inadvertently accept credit life insurance when they apply for a store account. "Some application forms are tricky and don't make it clear enough that the insurance is a completely optional service-you don't have to take it, and you shouldn't."

Retail card tips

If you do use retail credit cards, CA offers the following tips:

  • Ask about the interest rate before signing up for a retail credit card. If the rate is not disclosed on the application, call the financial institution issuing the card-don't rely on store salespeople for the information.
  • If you have a lower rate bank card and know that you won't pay off your purchase immediately, use it instead of your retail card. But make sure you make all payments on time-many bank cards charge late fees and impose punishingly high "penalty rates" for cardholders who miss just one or two payments. (See story.)
  • When taking advantage of the 10%-15% discount typically offered to consumers who open an "instant credit" account, apply it to a large purchase.
  • Pay discounted purchases off quickly, otherwise the discount will be eaten away by interest in a few months.
  • If you buy items on sale and then carry the cost on a card, the interest can quickly wipe out the savings from the lower sale price.
  • If you cannot qualify for a bank card, you may find it easier to obtain credit from a retailer. But some accounts offered to people with no credit history charge even higher interest rates.
  • Watch out for "0% financing" offers. While no interest is charged before a certain date, the entire balance must be paid before that time or else interest will be added to the balance on the cut-off date-retroactive to the time of purchase. A recent advertisement for an electronics superstore offered a 12-month grace period on its card's 22.9% interest rate. If you charged $1,000 worth of goods and made no payments, you would owe about $1,230 at the end of a year.

Federal lawmakers propose credit card protections

Anti-consumer practices of credit card companies have come under attack by federal law makers, who have proposed bills to ban extra fees for cardholders who pay their balances in full each month, prohibit penalty interest rates and stop companies from offering credit to people who cannot afford it.

These bills would no doubt meet with wide approval from consumers, but instead have hit a brick wall during subcommittee review. Two of the bills have languished for months in the House Subcommittee on Financial Institutions and Consumer Credit, while another was referred to the subcommittee in August.

Congressional sources say that the bills-all proposed by Democrats-haven't seen any action because the chair of the subcommittee, Rep. Marge Roukema, a Republican, has shown no interest in moving them along.

Congresswoman Roukema, of New Jersey, denied any political motivation. She said that other important bank-related legislation had taken priority. "In principle, [these bills] are on the right track, but we are not going to take them up in isolation," she said, adding that she believes they are more pertinent if combined with current Truth-in-Lending Act reform efforts.

Bankruptcy and 'easy credit'
'The blame for the number of consumer bankruptcies lies with unwise, irresponsible lending practies.' --Sen. Dianne Feinstein

The Senate and the House also have taken the opportunity presented by bankruptcy reform to propose amendments that would crack down on banks that offer credit cards irresponsibly without concern for the consumer's financial condition. Consumer advocates and lawmakers have long pointed to "easy credit" as a contributing factor to the increase in personal bankruptcies.

Sen. Dianne Feinstein (D-CA) offered an amendment that would require the Federal Reserve Board to conduct a study of the industry and to investigate card companies that appeared to be issuing credit "indiscriminately and inappropriately." The "creditworthiness amendment" (to S. 1301, the Bankruptcy Reform Bill) was unanimously approved on Sept. 23 for a full vote by the Senate. The House is considering an identical provision.

"Responsibility cannot be a one-way street with regard to credit," Feinstein said. "The blame for the current number of consumer bankruptcies lies not only with unsound consumer spending habits, but with unwise and irresponsible lending practices that facilitate and even foster recklessness. This amendment aims to deter such recklessness."

Zero balance protection

Rep. John J. LaFalce (D-N.Y.) introduced a bill (HR 4410) on Aug. 5 that would make it a violation of the Truth-in-Lending Act for any credit card issuer to cancel a credit card account or impose new fees or charges solely because a cardholder maintains a zero balance. (It's been estimated that 40% of all credit card users pay their bills in full every month.) HR 4410 was referred to the subcommittee and has not received any action.

Credit card insiders note that many companies are looking at ways to earn income from "convenience users" who avoid interest by paying all they owe each month. Under consideration are new annual fees for convenience users and/or a monthly fee of $1-$2 that would be charged in lieu of interest.

"At a time of escalating consumer debt and record levels of credit card delinquencies and personal bankruptcy, the banking industry should not engage in actions that discourage responsible use of credit and reduction in credit card debt," said LaFalce in a statement.

Prohibiting penalty rates

Rep. Joseph Kennedy (D-MA) last year introduced the Credit Card Consumer Act in response to a report by the Consumer Federation of America that looked at the exploding rate of credit card debt and its impact on working middle-class families.

Kennedy's bill (HR 1975) would prohibit penalty interest rates-the high rates imposed on cardholders who pay late once or twice-and allow consumers facing a rate increase to elect to close their accounts and pay off the balances at the old interest rate.

And, like the LaFalce bill, HR 1975 seeks to ban what Kennedy called the "GE fee" after the GE (General Electric) Rewards card, which began to charge a $25 annual fee to cardholders who did not pay at least that much in interest each year.

"We can no longer tolerate card companies that punish responsible consumers," said Kennedy last year when he introduced the legislation. His bill also called for card issuers to give "specific grounds for fee increases" to make clear in advance what actions would trigger rate and fee increases and require that interest rates on credit card "convenience checks" be clearly disclosed. (Variable rate increases that move with an underlying index, such as the prime rate, were excluded from the bill.) Kennedy's bill was passed to the subcommittee on July 14, 1997. According to Scott Olson of Kennedy's office, the Congressman did call for hearings on the bill earlier this year, to no avail.

However, Olson said that the bill's "GE fee" provision was introduced as an amendment to the Senate Bankruptcy Reform Bill on Sept. 28, along with a provision which would prohibit card companies from canceling an account solely because the cardholder paid in full each month. Olson said the second provision grew out of a move last year by Beneficial Finance to cancel certain accounts on a co-branded credit card for BJ's Wholesale Club. But Olson noted that there are no guarantees these provisions will make it under bankruptcy reform, either.

Firming up credit offers

Rep. Bob Menendez (D-N.J.) introduced the Fair Credit Card Application Act (HR 2662) last fall to eliminate the "bait and switch" tactics of credit card companies who send out pre-approved offers of credit promising a certain credit limit, but issue a card with a lower limit when the consumer accepts the offer.

Menendez' legislation would require credit card issuers to disclose the maximum credit limit available to the consumer, and give the consumer the right to state the lowest amount that would be acceptable. If the card company and the consumer do not agree, then the card company would be prohibited from processing the application and issuing the card. An aide to the congressman explained that many cardholders have been frustrated because they wanted to transfer balances, but after their applications were processed they ended up with a line of credit insufficient to transfer all of their other balances to the new card. HR 2662 has been with the subcommittee since Oct. 24, 1997, with no action taken since.

Keeping tabs on our lawmakers

Partisan bickering may stall many bills in committee, but it never hurts to let your own representatives in Congress know that you favor a certain proposal and to urge that it see some action. Because lawmakers have been known to ignore communications from people outside their districts, write to your own Senator or Congressmember, even if he or she did not sponsor the legislation you are interested in.

There are a number of resources on the Internet to help you find the address of your representatives to Congress, and others that you can use to send e-mail directly to their offices. These are some useful sites Consumer Action has found for tracking legislation and finding lawmakers:

  • The Senate Home Page (www.senate.gov) and the House of Representatives site (www.house.gov) help you find phone numbers and postal and e-mail addresses.
  • Thomas: Legislative Information on the Internet (http://thomas.loc.gov/) provides a wealth of information on bills, committees, and government resources. The site allows you to track where specific legislation is and what actions have been taken on it.

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