⚠️Don’t touch these 3 types of credit cards, otherwise your credit score will plummet! 📉💳
Do you think that having a bunch of credit cards means a high credit score and an easier life?
Don’t worry! Not every credit card is a “credit plus” for you. Some are even the **hidden killers** of your credit score! ☠️
Today we will reveal: which 3 types of credit cards you’d better stay away from, otherwise your credit report may become a disaster movie📉.
1. 🔥The first category: “pseudo-high-end cards” with high annual fees and low returns
You may have been tempted by the following advertisements:
“Enjoy the luxurious airport VIP lounge!”
“Free hotel upgrade treatment!”
“Exclusive travel benefits!”
Does it sound very high-end? But please calm down, these so-called “high-end cards” have annual fees of $450~$695, but the returns are very few! 💸
⚠️What’s the problem?
The annual fee eats up most of your rebates: You may save $300 points every year by swiping the card, but the annual fee is $495, and you are actually “paying back”.
Benefits that cannot be used are equal to zero: If you do not travel frequently or stay in high-end hotels, these so-called “high-end benefits” are not useful at all.
Long-term non-use will lower your credit score: If you do not use it after applying, you will suffer the double damage of “high debt, low utilization rate + short card age”.
❗Real case:
Jack applied for a “black card” with an annual fee of $595, just to show off the metal card. As a result, six months later, not only did he not use the travel benefits on the card, but he also closed the card in advance because he could not afford the annual fee. 👇
Result?
👉 Credit history was shortened and the score plummeted by 30 points!
✅Suggestion:
See clearly whether you can really use the benefits;
If you do not travel, travel, or play golf – this kind of card is a big pit for you! 🕳️
Second, 💀The second category: “Prepaid Credit Cards”
They are often disguised as credit tools “suitable for beginners” and “suitable for those with no credit history”.
But the truth is: **It won’t help you build a credit history at all! **😱
❌Completely different from “secured credit cards”
Prepaid Card: Use your own pre-loaded money, which will not be reported to the credit bureau at all, equivalent to a cash card.
Secured Card: Although a deposit is also required, credit behavior will be reported, which helps build credit scores.
⚠️Where is the problem?
Unable to build a credit history: No matter how much you swipe, the credit bureau can’t see it.
High annual fees and handling fees: Many prepaid cards also charge maintenance fees every month, such as $5~$10.
Many hidden terms: Some even charge handling fees for recharges, withdrawals, and balance inquiries.
❗Real case:
Sarah thought she applied for a “beginner’s exclusive credit card”, but it turned out to be a NetSpend prepaid card. She used it for a year and spent nearly $120 in handling fees, but her credit score did not move at all! 😵💫
✅Suggestion:
For beginners to build credit, please choose “Secured Credit Card”;
Common good choices include: Discover it Secured, Capital One Secured Mastercard.
3. ⚡The third category: “zero interest rate cards” with traps
Does 0% APR sound super good? Especially those that advertise “interest-free for the first 12 months”, which seem to be “transfer saviors”. But this type of card often hides interest rate bombs💣!
⚠️Where is the problem?
Once the interest-free period is over, the interest rate will soar to more than 20%: if you are not careful and fail to pay off the balance, you will be hit by high interest in an instant.
Delayed repayment = full retroactive interest: Many “Deferred Interest Cards” will charge interest on all past interest-free amounts when you have not paid off the full amount!
Frequent applications affect hard credit inquiries: This type of card often makes people “frequently apply”, resulting in too many hard inquiries in your credit report, which will lower your score instead.
❗Real case:
Tom applied for three 0% APR credit cards for transfers and furniture purchases. However, 12 months later, he was charged $300 in interest for a $2,000 balance that was not paid off. His credit score dropped by 60 points and his credit utilization rate soared!
✅Suggestion:
Unless you are 100% sure that you will pay it off on time, don’t touch these “seemingly invincible” cards;
Note the term: “Deferred Interest” ≠ “True 0% Intro APR”.
🚨Tips: Alternatives to avoid these 3 cards
Problematic card type Safer choice Reason
High annual fee and low return card No annual fee reward card For example, Citi Double Cash, Wells Fargo Active Cash, 2% cash back and no annual fee, stable! 💰
Prepaid card Secured credit card Report to credit bureau, help build credit history
Fake 0% interest card Real 0% APR + no retroactive terms card For example, Chase Freedom Unlimited, Intro 0% is really not a lie! ✅
📈If you don’t choose the right credit card, your score will get lower and lower!
Many people think: “As long as you pay on time, you won’t lose points”, this is a big misunderstanding!
The composition of credit score:
📊 35% is repayment record
📉 30% is credit utilization rate
📆 15% is account history (card age)
🧾 10% is the number of new accounts
🔍 10% is the diversity of credit types
So, even if you don’t overdue payments, as long as:
The card age is too short,
The utilization rate is too high,
Too many new cards and too frequent checks…
Your credit score may drop silently! 🫣
✅Conclusion: Smart card swiping is the way to go! 👑
Don’t be fooled by “cool card face”, “zero interest rate” and “airport VIP lounge”.
Credit cards are not for showing off, but an important tool for you to build financial credit and open asset channels.
Remember:
💳 Use the right card, your credit score will go to heaven;
💥 Use the wrong card, your score will go to hell!
The ultimate guide from novice to expert!:
Credit Card Handbook
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