5 On Your Side

What Are the Best Credit Cards to Use?

Posted October 22, 2007

Americans charge nearly $2 trillion a year on their credit cards, but many consumers are not getting the best deal they could. A recent survey revealed what people think of their credit cards and the institutions that issue them.

Although credit cards have become near-necessities, people need to pick carefully. A card that is right for one person might not be for another. Choosing the wrong card can add up to high interest rates and extra fees and create a lot aggravation for the consumer.

Citibank spends $220 million a year on advertising, more than any of the other top five credit-card issuers. Its commercials claim its cards are "Rewarding. Very, very, very rewarding!"

But if you want a reward card, check your spending habits to make sure the card is worth it. Reward cards usually carry an annual fee and tend to have higher interest rates – not good for those who carry a balance from month to month.

If you carry a balance, a low interest rate is the most important consideration for you.

If you pay off your balance every month, interest rates are not much of a concern, so look for a card with a low or no annual fee.

Consumer Reports found that all card issuers are not equal. A survey of 36,000 readers reported the most complaints about cards issued by the biggest banks. Citibank, Chase, Bank of America, Capital One and HSBC were unimpressive in the survey.

"Compared with those of better-rated companies, customers of these banks complained more about late fees, unexpected interest-rate hikes and poor customer support," Rosalind Tordesillas, of Consumer Reports, said.

People said they were much happier with cards issued by credit unions. USAA Federal Savings, which is open to people in the military, veterans and their families, topped the list.

"Two of the higher-rated credit-card issuers were credit unions," Tordesillas said. "Their median interest rates were 10 and 11 percent. Compare that with 17 percent for two banks among those at the bottom of our ratings."

Credit unions are also better at resolving problems, the Consumer Reports survey revealed.

Many credit unions have started allowing relatives to join, and some have much more open membership policies than they used to.

Consumer Reports' bottom line: Using a credit card you are happy with can save you a lot of hassles, and add up to a lot of savings over time.

18 Comments

Please with your WRAL.com account to comment on this story. You also will need a Facebook account to comment.

Oldest First
View all
  • thecatsmeow Oct 24, 2007

    I've had to use a card for emergencies and I hate to admit that I have more on there than I want to but the medical bills, car repairs and school expenses added up. But, I like this card. It's Bank of America and the fee is a fixed 4.9%. The SECC card is over 9%. I pay way above the amount due so hopefully it will get paid off within a year.

  • hersheyspots Oct 24, 2007

    The best card is to have no card at all!!! My husband & I learned our lesson after getting into a lot of debt from credit cards. We had to go through a debt consolidation program to pay them all off, & we are still paying for them. For the last 4 years, we have not used a credit card to do anything. We even went to Disney World this summer without a credit card. We saved our money & budgeted really well & had a wonderful time. It is also nice at Christmas not to have to worry about paying for Christmas at the beginning of the new year.

  • OLD PIRATE Oct 24, 2007

    Chase was dropped by Shell and they went to Citi...same discount still applies... Your local gasoline retailer is really taking a beating with credit card fees...we all pay higher gas prices because of this. Amer.Exp is one of the worst.They promise their users the world and pass it back to the dealers.
    Using cards from the oil company that supplies your dealer or one associated with that oil co. can save your dealer some real expenses..and that can mean lower prices per gallon. Most wholesale oil distributors would gladly exchange their bottom line for the credit card fees...Somebody is making a killing on cards.

  • jse830fcnawa030klgmvnnaw+ Oct 23, 2007

    I don't carry a balance in my credit cards, so rates don't matter to me.

  • dnguyen68 Oct 23, 2007

    OLD PIRATE - We are doing the same thing but with a Chase credit card for several years now. We used to have the Shell credit card too but they dropped the "gas cash back" after 2 years so we switched to Chase.

  • jeebk04 Oct 23, 2007

    elcid, been with SECU since 97 and love em, love em, love em!

  • jeebk04 Oct 23, 2007

    The only credit card that is "good" is one that can be paid off completely every month.

  • godukebasketball Oct 23, 2007

    I use USAA for all my banking needs and absolutely love them. No fees, low interest rates, and great reward programs. I agree that the best "credit card" is cash and would use it except for the fact that I get money back on my CC. I pay it off every month so never pay interest. Would not go with anyone other than USAA.

  • Squirreling Dervish Oct 23, 2007

    I have one CC. AMEX. I have used it all over the planet and never had a problem. Had it for almost 20 years, and never a single probblem. If I saw a charge on there that was not mine, called them, they took it off and I never heard about it again. Either AMEX or pay cash (to me, same difference)

  • aquamama Oct 23, 2007

    None!

More...