Released: July 28, 2005

2005 Credit Card Survey

Table of Contents

Please note that you are prohibited from using CA's name or any reference to its surveys in advertising or for any other commercial purpose.

Card companies use common ‘risk factors’ to impose unfair rate hikes, finds CA

Credit card penalty interest rates and universal default rate hikes, often cited as a way for card companies to manage risk, top the list of unfair credit card practices. In its new credit card study, Consumer Action (CA) uncovered the top reasons that lead banks to impose penalty rates. CA’s findings show that anyone—not just people in financial difficulties—could be subjected to a much higher rate.

Universal default

Universal default rate hikes are imposed by credit card companies based on the way customers handle other credit accounts. This year, 44.68% of banks said they have universal default policies—a slight increase from last year’s survey. According to customer service representatives, the following circumstances, in descending order of importance, can trigger a universal default rate hike:

  • Credit score gets worse: 90.48%
  • Paying mortgage, car loan or other creditor late: 85.71%
  • Going over credit limit: 57.14%
  • Bouncing a payment check: 52.38%
  • Too much debt: 42.86%
  • Too much available credit: 33.33%
  • Getting a new credit card: 33.33%
  • Inquiring about a car loan or mortgage: 23.81%

CA found default and penalty rates as high as 35% (Merrick Bank). Runners-up for the highest default rates are Citibank and Providian at 29.99%.

Eleven of the 21 banks with universal default policies are willing to reduce the higher rates if cardholders’ credit histories improve. Three more banks said it was “possible.” Twelve banks out of these 14 said that after six months of improved credit, the rate might be adjusted downward—although not always to the original rate.

Advance notice of default or penalty rate increases is not required by law. In many cases, the first time consumers learn of a rate increase is when they open their statements. This year, several large banks such as Citibank, Chase and MBNA announced their intentions to give cardholders advance notice of such interest rate increases and allow cardholders to “opt out” of paying them. However, when consumers decline to accept the change, they lose the use of the card.

“It’s nice to get a warning,” said CA’s Linda Sherry, who coordinated the survey, “but for many folks, there is nothing they can do with the heads up. They can’t afford to pay off the balance, and to transfer the balance to another credit card they need a clean credit record.”

Sherry noted that people who reject the change of terms lose the use of their card, immediately or at the end of the expiration period, depending on the bank. “The opt-out protects you from the higher interest rate, but it’s unfair in any case to raise the interest rate on an existing balance.”

Survey at a glance
Issuers: 47
Cards: 146
Average APR: 12.61%
Variable Cards: 118
Average Variable APR: 12.96%
Average Variable Rate Range: 6.00% (Ranier Pacific, Town Bank and Wells Fargo) to 24.94% (Merrick Bank)
Fixed Rate Cards: 28
Average Fixed APR: 11.15%
Fixed Interest Rate Range: 6.5% (Pulaski Bank) to 16.50% (Commerce Bank)

Penalty rates

Penalty rates are much higher interest rates triggered when you pay your credit card bill late—even once. Late payments are not the only reason issuers impose higher penalty interest rates. Going over your credit limit or bouncing a payment check can trigger a rate increase, too, in addition to hefty fees.

The average penalty rate this year is 24.23%, up from the 2004 average of 21.91%. This increase is probably attributable to the fact that many penalty rates vary with the Prime Rate, and from last year’s survey to this year’s the Prime Rate increased two percentage points (from 4% to 6%).

Late payments result in higher penalty rates with 78.7% of the issuers—a drop from 85% of the issuers last year. Of the issuers who assess penalty rates, 43.2% said a penalty rate could be triggered by just one late payment. Last year just 31% assessed a higher rate after one late payment.

More than half (57.45%) of the banks with penalty rates were willing to reduce the rate if cardholders improved the way they handled their accounts. Six more issuers said it might be possible to reduce the rate. In most cases this means an on-time payment record of six months or more and then cardholders must ask for a rate review.

More findings

CA’s yearly snapshot of credit card industry practices examines 146 credit cards from 47 banks. Janice Kohn, Joseph Ridout and Joe Caldarola conducted the survey between April 1 and June 21, 2005.

The average interest rate for all cards is 12.61%, ranging from 6% (Ranier Pacific, Town Bank and Wells Fargo) to 24.94% (Merrick Bank). The 2005 Credit Card Survey found that 118 of surveyed cards have variable rates, with an average interest rate of 12.96%, and 28 cards have fixed rates, with an average rate of 11.15%.

Bounced check fees

If your payment check to your credit card company bounces, 42 (89.3%) of the surveyed banks will charge you a fee. The average bounced check fee at these banks is $28.61. The fees range from $15 (First Internet Bank of Indiana) to $38 (American Express).

Late payments

Of surveyed cards, 138 (94.52%) carry late payment fees. The average late fee this year is $27.46, only a penny off the 2004 average. Thirty-two issuers (68.1%) assess a late fee immediately if the payment is not received by the due date.

This year 40% of surveyed issuers employ tiered late fees tied to the cardholder’s balance, a decline from the 48% of issuers with the policy last year. The difference is probably attributable to mergers between large issuers such as Bank of America and Fleet, and Chase and Bank One/First USA.

“The nature of the industry, with mergers and the fact that companies are constantly adding new cards and dropping old ones, makes it difficult to provide an apples-to-apples comparison from year to year,” said Sherry. In 2003, only 20% of surveyed issuers used tiered late fee structures.

Late fees on surveyed cards

Cards Late Fee
21 Tiered fee, with an average of: $29
17 Tiered fee, with an average of: $27.67
14 $29
14 Tiered fee, with an average of: $27
14 Tiered fee, with an average of: $26.33
13 Tiered fee, with an average of: $27.67
10 $35
7 $25
4 No fee
3 $39
3 Tiered fee, with an average of: $34.33
3 Tiered fee, with an average of: $25
3 Tiered fee, with an average of: $22
3 $20
3 Tiered fee, with an average of: $18.33
3 5% of minimum payment due ($15 minimum)
2 Tiered fee, with an average of: $29.67
2 $16.50
1 Tiered fee, with an average of: $32
1 Tiered fee, with an average of: $23.33
1 Tiered fee, with an average of: $21.97
1 Tiered fee, with an average of: $12.50
1 $10
1 5% of minimum payment due
1 $5.40

Over-limit fees

138 cards (93.87%) have over-limit fees. The average fee on those cards is $30.18. Contrary to what many people believe, a purchase that takes you over your credit limit will not necessarily be denied. Instead, you’ll be stuck with an over-limit fee, which can be assessed every month until your balance is under the limit. The fee can be as high as $39 at Citibank and MBNA. Many banks now use average daily balances to determine if you’ve exceeded your limit at anytime during the billing cycle, instead of the ending balance on your monthly statement. This can trigger an over-limit fee even if you are not over limit at the close of the billing cycle.

The industry should either deny charges that go above the credit limit or not charge a fee,” said Sherry. “If they are going to accept charges over the credit limit they should be happy just with the added interest and be forbidden from adding on fees.”

Over-limit fees charges

Cards Fee
65 $35
26 $29
17 Tiered fee, with an average of : $27.66
11 No fee
7 $20
6 $25
4 $39
4 Tiered fee, with an average of : $20
2 $10
2 Tiered fee, with an average of : $10
2 5% of over-limit amount ($15 minimum)

Cut-off times

CA found that 34% of banks set a cut-off time on the due date. Payment deadlines on the due date ranged from noon local time to 9 p.m. Eastern time.

Grace periods

Grace period Cards
25 days 74
20 days 56
20-25 days 14
22 days 1
No grace period 1

Credit limits

Twenty-five (53%) surveyed banks said that they reduce cardholders’ credit limits under certain circumstances, usually for the following reasons:

  • Late payments, going over limit or account in collection.
  • Poor credit report or your credit score declines.
  • Excessive late payments.
  • Having several cards from the same issuer. (This frequently happens when credit card companies merge.)
  • Account subject to a default (penalty) APR.
  • Your income falls.
  • Too much of your outstanding credit is used.
  • “Severe account abuse.”
  • You become a credit risk.

Annual fees

Cards without annual fees make up the majority at 67.35% (99 cards). Of the 47 cards that have annual fees, the average fee is $43.27—an increase of 15.9% from last year’s $37.33. (This is perhaps because of the higher number of mileage and rewards cards CA is seeing.)

Cash APRs

Of the 146 cards surveyed, 74.8% have a higher APR for cash advances taken with the card. The average cash advance rate on these 110 cards is 20.23%. On cash advances, the interest begins to accrue immediately, even if you do not carry a balance.

Cash advance fees

Among surveyed cards, 137 (93.2%) have cash advance fees that average 3.01%. The cash advance fee is limited to a maximum charge on 35 of the cards. Maximum charges protect consumers from higher fees, but minimum charges can result in a higher payment than would be necessary under a strict per-centage approach. Maximums range from $10-$75 and average $41.28. A minimum charge applies on 132 of the cards. The minimums range from $2-$15 and average $6.98.

Balance calculation

Five surveyed banks (10.63%) use two-cycle billing. Cards issued by Chase, Discover Bank, National City Bank, Providian and First National Bank of Omaha employ dual cycle billing. Because of the Chase merger last year with Bank One, issuer of First USA cards, conditions may vary on Chase cards.

Only people who carry a balance occasionally are affected by credit cards that use two-cycle average daily balance, as it results in a higher finance charge in the second month you carry a balance than you would pay on a card with one-cycle billing.

Arbitration

Twenty-one (44.7%) of the surveyed banks confirmed that they require consumers to settle disputes using arbitration. Of those banks, 15 (71.4%) insist on “binding” arbitration decisions, which prevent cardholders from appealing the decision.

Introductory rates

Of the 146 surveyed cards, 70 (47.6%) offer teasers on new purchases, 91 (61.9%) on balance transfers and 22 (14.96%) on cash advances or convenience check transactions. (Convenience checks are checks tied to your credit card account. When you write one and give it to the payee, you are taking out a cash advance on your credit card.)

  • Purchases: Short-term “teaser” promotions on purchases include 48 cards with “Zero%” offers. Fourteen of these offers last for 12 months. Other APRs on purchase teasers range from 1.70%-8.99% and last for 6 to 15 months.
  • Balance transfers: Intro rates on balance transfers include 57 Zero% offers. Twenty-one of the offers last 12 months. On four American Express cards, it is possible to transfer a balance and pay 9.99% interest for the life of the balance. Other APRs on balance transfers range from 1.70%-8.99% and last for 6-10 months.
  • Cash advances: Two companies, HSBC and Ohio Savings Bank (an MBNA card), have interest free offers on cash advances for 12 months and Juniper Bank has one for six months. Low rate introductory offers on cash advances range from 1.70%-9.99%.

Rewards cards. Among the surveyed cards, 52 (35.6%) offer rewards such as cash, miles, auto purchase points, merchandise points and gasoline.

The overall percentage of credit card offers from surveyed banks with rewards has increased sharply since last year’s 23%.

“We see a shift in the industry toward cards that give something back, because industry research shows that rewards cardholders make more purchases, tend to use their rewards card exclusively and are less likely to jump ship for a lower-rate card,” said Sherry.

For more on rewards cards, see Reaping rewards...or not ? See introductory offers chart on details of all teaser offers found by CA during the survey.

Minimum payment size eyed by federal regulators

In September 2004, federal bank regulators directed credit cards issuers to make sure that minimum payments on credit cards are large enough to reduce the cardholder’s balance and not just cover finance charges or fees. Several banks have responded by requiring each month that cardholders pay current interest charges and fees in addition to a small principal payment.

Calculations by Consumer Action show that this method will cut years off repayment time. However, paying a $1,000 balance under a typical new minimum payment formula—even with no new purchases—will still take more than five years to pay off.

2% minimum payment example Citibank calculation method
$1,000 balance $1,000 balance
17% APR 17% APR
2% minimum payment = $20 1% of balance = $10
Interest Paid: $14.17 Interest payment: $14.17
Total payment: $20 Total payment: $24.17
Balance reduced by $5.83 Balance reduced by $10
At this rate, the debt would take 207 months to pay off, at an interest cost of $1,590.35. At this rate, the debt would take 63 months to pay off, at an interest cost of $512.82.

In the past decade, minimum payments typically have been figured as a percentage of the balance, with many banks requiring only 2%. Learning of the regulators’ dictum, many people assumed that companies would raise their minimum payments requirements to 3%-4%. However, many early responders have instead required that cardholders pay current interest and fees each month along with a small payment to be applied toward the balance.

Regulators had expressed concern that making small minimum payments—especially payments requiring only 2% of the balance—would cause consumers with high credit card rates to increase their debt because they are not even paying all the interest being charged. If none of the payment is applied to the balance, it can result in “negative amortization,” causing the balance to increase even if the cardholder makes no new purchases.

CA finds that many banks have not changed practices in response to the regulators’ directive.

According to CA’s new survey, top credit card issuers Bank of America, Citibank, MBNA and Chase have since last year changed the way in which they calculate minimum payments. Instead of figuring monthly minimum payments using a simple percentage of the balance after new finance charges have been added, Citibank and Chase are asking that 1% of the balance be paid each month, in addition to new finance charges and fees. Bank of America is requiring cardholders to pay $10 plus new finance charges and fees. MBNA requires cardholders to make a payment equal to 2.25% of the balance, or $15, whichever is greater, plus finance charges and fees. (See chart below.)

How surveyed banks calculate the minimum payment

Calculation method Banks
2% of the balance Appalachian Community Bank/Gilmer Bank, Universal Savings Bank, Wilmington Trust Company
2.5% Amalgamated Bank, American Express, HSBC Bank USA, National City Bank, Wells Fargo
2.5% to 3% EverBank
3% BB&T Bank, First Federal Bank, M&I Bank, Nordstrom Federal Savings Bank
2% (or $10, whichever is greater) Cambridge Bank and Trust, Citizens Bank, Discover Bank, Metropolitan National, Pulaski Bank, Simmons First National, State Farm, Tompkins Trust Company, Town North Bank, US Bank
2% (or $15) Juniper Bank, TIB Independent Bankers Bank
2% (or $20) BMW Bank, Rainier Pacific Bank
2% (or $25) First Internet Bank of Indiana, Franklin Templeton Bank & Trust
2.5% (or $10) First Penn Bank
2.5% (or $15) GE Money Bank
2.5% (or $20) Household Bank
3% (or $50) First Command Bank
3% (or $10) RBC Centura Bank
3% (or $15) Capital One, Commerce Bank, Merrick Bank, Providian
3% (or $20) First National Bank of the Mid-Cities
5% Helena National Bank
5% (or $10) Arkansas National Bank
$10, plus current fees and finance charges Bank of America
1% of the balance, plus current fees and finance charges Citibank
2% or $10, or 1% of the balance, plus current fees and finance charges Chase, First National Bank of Omaha
2.25% of the balance ($15 minimum) plus any new finance charges MBNA
Divide by 60 and add current finance charges Penn Security Bank and Trust Company

CA’s research also shows that most surveyed banks have not changed practices in response to the regulators’ directive. Most continue to calculate the minimum payment using only a percentage of the balance and include:

  • Nineteen (40.4%) require a 2% minimum payment, with 16 of them insisting that cardholders pay at least $10-$20.

  • Nine (19.1%) ask for a 2.5% payment, with four requiring cardholders to pay at least $10-$50.

  • Ten (21.3%) ask for a 3% payment, with six requiring at least $10-$20.

"In the 1980s, it was pretty typical to see 4% minimum payments,” said CA Executive Director Ken McEldowney. “In our surveys since that time, we noted an almost across-the-board move toward 2% minimum payments—which certainly is not high enough.”

Banks have latitude in responding to the regulators’ directive, but whatever their response, the results will be scrutinized during periodic regulatory examinations. Federal bank examiners will be on the lookout for “inappropriate” account management, risk management and loss allowance practices. Regulators especially frowned on minimum payment requirements that “consistently fall short of covering all finance charges and fees assessed during the billing cycle” and that allow the “outstanding balance to build.”

“The pitfalls of negative amortization are magnified when sub-prime accounts are involved, and even more so when the condition is prolonged by recurring over-limit fees and other charges that are primarily intended to increase recorded income for the lender rather than enhance the borrowers’ performance or their access to credit,” said bank regulators. “Prolonged negative amortization, inappropriate fees, and other practices that inordinately compound or protract consumer debt and disguise portfolio performance and quality raise safety and soundness concerns and are subject to examiner criticism.”

The best advice is to pay more than the minimum. “If you are carrying credit card balances, pay them down by making the largest minimum payment you can,” advises McEldowney. “Even with the changes, paying only what the card company asks will keep you in debt for many years.”

Questions arise over credit card foreign transaction fees

Visa, the dominant credit card payment network, announced this spring that it was changing its 1% currency conversion fee to a 1% “foreign transaction” fee charged on all cross-border transactions made in dollars or foreign currency.

CA finds that cardholders may pay a fee of up to 3% of the transaction when making purchases from merchants outside the U.S.

Some foreign merchants offer optional “dynamic currency conversion” to immediately convert your purchase into dollars when you buy something abroad. This means the purchase price is converted to dollars before it’s passed to your credit card company. However, it is far from clear whether this will exempt cardholders from a 1% fee assessed by MasterCard and Visa on foreign transactions.

“It’s possible you could be billed three times for conversion if you take the dynamic currency conversion option—by the merchant, the card payment networks and your credit card company,” said Linda Sherry of Consumer Action, noting that many card companies add their own fee to foreign transactions.

MasterCard said that it might charge a fee on dollar-based cross-border transactions that would be slightly lower than its currency conversion fee of 1%. If the company adopts a change, it would continue to charge 1% when it converts purchases made in foreign currency.

Sherry noted that if the fee is charged on dollar-based, cross-border transactions it might affect Internet shoppers. “Nowadays it is common to buy online from foreign companies.”
The majority of top 10 credit card issuers add their own fee on top of the currency conversion fee charged by MasterCard and the foreign transaction fee charged by Visa. Consumer Action’s survey finds that cardholders may pay up to 3% of the transaction amount. (See chart below for banks that charge an extra fee.)

Foreign Transaction Fees

MasterCard and Visa charge a 1% foreign transaction fee. Customer service representatives at the banks below told CA’s surveyors that the banks they work for add a percentage-based fee of their own. The percentages shown include the MasterCard-Visa 1%. The banks listed with “no fees” absorb the MasterCard-Visa 1% fee and do not pass it through to cardholders. All other surveyed banks (see Credit Card Survey) pass through only the MasterCard-Visa 1%. American Express, not affiliated with MasterCard or Visa, charges a 2% currency conversion fee.

Banks Fee
Bank of America, Cambridge Bank and Trust, Citibank, Citizens Bank, Commerce Bank, First National Bank of Omaha, JP Morgan Chase, MBNA, Metropolitan National, National City Bank, Ranier Pacific Bank, US Bank and Wells Fargo

 3%
BB&T Bank, Helena National Bank, Juniper Bank, Pulaski Bank and Simmons First National Bank

 2%
American Express 2% *
Amalgamated Bank, BMW Bank, Capital One, Discover and Tompkins Trust Company No fees
*Note: American Express, not affiliated with MasterCard and Visa networks, charges a 2% fee.

Five surveyed banks do not pass on foreign currency transaction fees and do not have their own charge. Twenty-three banks pass along the 1% MasterCard-Visa fees to cardholders. Surveyed banks with their own, extra currency conversion fees include:

  • 13 issuers (27.6%) that charge 2%.

  • 5 issuers that charge 1%.

  • American Express, which charges 2%.

Using your credit card abroad is still one of the most cost effective ways to pay while traveling. Even with the 3% currency conversion fee charged by most major credit cards, using your credit card abroad remains a bargain.

Of the top 10 card issuers, only Capital One has no fees on foreign transactions. It never added a surcharge of its own, and it has stopped passing along the MasterCard-Visa fee to its cardholders.

MBNA, which held out in adding its own currency conversion fee, announced in April that it would assess a total 3% charge, including the MasterCard-Visa fee, on all cross-border foreign transactions.

Reaping rewards…or not? Look before you leap on rewards cards

By P. Slavin

Rewards cards allow cardholders to earn perks such as cash rebates, points toward merchandise or airline mileage.

Gerri Detweiler, author of “The Ultimate Credit Handbook,” is an authority on credit card reward programs. But she admits to learning some personal lessons the hard way. Some years ago, while living in Washington, D.C., Detweiler tried to use bonus airline miles she’d earned on a reward credit card to visit her sister in Alaska. She quickly accrued enough points on her card to earn a free ticket, only to find she could not board Alaska Airlines in Washington. Her only choice was to buy another ticket and fly to the West Coast to pick up an Alaska Airlines flight.

Detweiler tells the story to make a point: Make sure the reward in question will actually be of benefit to you. “Think it through,” she warns. “Is the ‘reward’ one you really want or need?”

The fundamentals

There’s more to rewards cards than you might imagine. To get the most from one—or to avoid losing its benefits and even being penalized—you have to stay on your toes. These cards require you to exercise discipline over your finances, keep your goals in mind and do your homework.

Consumers need to know the fundamentals of smart use of reward cards, experts say. The first rule of thumb, according to Curtis Arnold, founder of CardRatings.com, is “if you occasionally carry a balance on your cards, you should avoid the allure of reward cards. Most reward cards have higher interest rates than traditional credit cards and some, particularly airline reward cards, have annual fees. Such disadvantages usually far outweigh any rewards you might earn.” If you plan to carry a balance, adds Arnold, you’re better off looking for a low-interest credit card.

Second, says Arnold, don’t blow your monthly budget just to get rewards. “It’s very alluring to get a couple hundred dollars back at the end of the year.” but if you exceed your budget and can’t pay your credit card bill in full, you will likely be looking at finance charges far greater than the value of your rewards.

Third, he advises that you do not “bank” your points, which means you let them accumulate. Too many things could happen—the card might scale back the points you’ve already earned or the airline could fail. “You could lose all your points,” says Arnold.

Detweiler suggests that if you run into financial problems such as divorce, illness, or job loss, cash in your rewards as soon as possible. If you’re late in paying your credit card bills, you’ll forfeit your rewards.

The fine print

To get the most out of reward cards and avoid the pitfalls, experts say you have to look at the fine print and analyze what a card offers.

Individual cards that allow you to choose the reward you want from a menu, including cash back, points toward merchandise or airline miles, may provide the least rewards in the long run. Having more than one option on the same card is a plus, says Arnold, but if you choose the cash back option you may find that the card is much less valuable than a card that offers only a cash back reward. Cash back cards may pay 1%-5% back on your purchases. However, Arnold warns that cards with a variety of rewards give you the cash equivalent of only a quarter or half of a percent on purchases. The difference can amount to hundreds of dollars a year.

Arnold points to a recently marketed Discover card that promised 2% back on all purchases. People thought they were going to get 2% in cash, “but you could only get up to 1% in cold cash. To get 2% back, you had to use the points for merchandise.” And in discount stores like Wal-Mart and K-Mart, he says, the reward is only a quarter of a percentage point of all purchases.

If your reward is coming to you in gift certificates or merchandise points, make sure the stuff interests you. (You can view some companies’ offerings online.) Research how many points are required for an item and compare that with its retail price. For example, a new bicycle for $25,000 worth of points is a bad deal if you could buy the bike for $100. “You’re better off with a plain Jane 1% cash back [card],” says Arnold.

Look for the restrictions on using your airline miles. There may be no seats available on a desired flight or travel may be limited to certain times and days. If you want to run your child’s college tuition or your income taxes through your rewards card, you may be stymied by annual mileage caps.

“Tiered cards” tie rewards to your spending levels—the more you spend, the higher your point percentage becomes. If you charge $2,000-$5,000 a year, you probably will earn a quarter percentage point, but if you charge over $10,000 you may earn 1.5%, and up to 5% for purchases at stand-alone drugstores, supermarkets, and gas stations.

Experts say if you charge less than $10,000 in a year, you’re usually better off with a card offering a flat 1% “cash back” on all purchases.

Watch for earnings limits on reward cards. A heavy card user can reach the cap in six months and earn no rewards the rest of the year. For example, the Citibank Dividend Platinum Select Master Card offers a rebate of 5% on some purchases from the first dollar, but $300 is the most you can earn. That’s just $6,000 in applicable purchases.

Getting the ultimate reward

  • Ask if the annual fee can be waived the first year.

  • Use your rewards card for everyday purchases that you can pay in full each month. Use a low rate card for carrying balances.

  • Pay on time—you can lose your miles or rewards if you make a late payment.

  • Look for cards that offer free or low-priced companion tickets.

  • Choose a card with a generous expiration policy on points and miles and no blackout or seat restrictions.

  • Remember that cash advances, fees and finance charges don’t count toward rewards or miles.

  • If you have a cash back card, remember to ask for a check when the minimum rewards pay-out has accrued.

Cash is king—‘up to’ a point

By Jennifer Daw Holloway

On average, American households have 11 credit cards. What would entice consumers to take on yet another card? Rewards!

Ranging from "cash back" to airline miles to NASCAR merchandise, credit card companies are targeting your particular interests with hard-to-refuse offers.

In its new survey of credit cards, Consumer Action (CA) found 52 cards offering rewards such as cash, miles, auto purchase points, merchandise points and gasoline. Many people like cold hard cash—available from American Express Blue Cash, Bank of America Money Return Platinum, Chase Manhattan's Cash Builder and Free Cash Rewards, Citibank AT&T Universal Cash Back Rewards and the Wells Fargo Cash Back Platinum. Watch for the words "up to," as they can signal that the reward is capped at a certain spending level.

  • Bank of America's Money Return card pays you 10% of your interest charges at the end of the year. The card has a fixed Zero% introductory APR on purchases and balance transfers for the first six billing cycles following the opening of your account, so you won't get any cash back for that period. After six months, a variable APR applies.

  • American Express Blue Cash is tied to spending, not interest, and requires that you spend at least $6,500 to receive its full 5% back on purchases. Cash rewards are based on your prior spending and annual rewards are capped after you've spent $50,000. The card comes with a Zero% introductory offer for the first six billing cycles.

  • Chase Cash Builder has rebates based on tiered balances: 0.25% for the first $2,000, 0.50% for $2,000- $4,000, 0.75% from $4,000-$6,000 and 1% for purchases above $6,000. When you carry a balance, your reward is doubled, up to 2 percent for balances over $6,000. (Remember that when you carry a balance you are paying interest.)

  • Chase Free Cash Rewards allows you to earn one point for every $1 in card purchases. Accrue 2,500 points and you can choose between a $25 check or a $25 gift certificate to national chain restaurants and merchants. Rewards are limited to 60,000 points per calendar year, or about $600 in cash or gift certificates.

  • The AT&T Universal card, issued by Citibank, gives you up to 5% back on purchases. You can only earn $300 each year and you have to wait until you’ve earned at least $50 to get a check. The checks are not automatically sent—you need to ask.

  • Wells Fargo’s Cash Back Platinum gives up to 1% cash back. You get the full 1% only after you have racked up more than $450 worth of purchases in each billing cycle. You earn cash rewards at a lower percentage rate on the first $450 in purchases during each billing cycle.

Your money does not arrive automatically—you have to call and request it. Wells Fargo issues your money in $20 increments, so if you want the $132 you earned, you can get only $120 until you earn more. The maximum cash reward you can earn in a year is $500.

Most cash-back cards define “eligible” purchases as those made at stand-alone stores such as supermarkets, gas stations and pharmacy chains. Purchases at discount warehouses, department stores, convenience stores and mail order and online catalogs may earn at a lower rate or even be ineligible for cash rewards.

Consumer Action 2005 Credit Card Survey

Note: You are prohibited from using Consumer Action's name or any reference to its surveys in advertising or for any other commercial purpose.

Key:
APR - Annual Percentage Rate
V - Variable interest rate
F - Fixed interest rate
* (Asterisk) - See note in
Additional Information column.
Min. : minimum fee
Max.: maximum fee

 Definitions:
Annual Percentage Rate (APR): The yearly interest rate. The APRs listed are for purchases—cash advances often carry a higher APR.

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.		 Notes:
• Survey was conducted between 4/1/05-6/21/05.
• Survey does not include introductory or promotional (teaser) rates. (See the introductory offer chart for teaser rates at the time of the survey.
• For variable rates, the APR may not reflect recent changes in the index, such as the Prime, Federal Discount rates or LIBOR. (The Prime Rate was 6% during this survey. It was changed to 6.25% on June 30. Bankrate.com lists all current index rates.)

Amalgamated Bank - Gold Plus card 800-365-6464 • www.aboc.com

  • Annual Fee : $45
  • A P R :8% V
  • Additional Information : Cash advance fee: 2.5%/$2.50 min./$30 max. Late fee: $25. Over limit fee: $20. APR is Prime + 2.5%

Amalgamated Bank - Gold card

  • Annual Fee : None
  • A P R :10% V
  • Additional Information : APR is Prime + 4.5%. Other terms same as above.

Amalgamated Bank - Standard Plus card

  • Annual Fee : $37
  • A P R :8.25% V
  • Additional Information : APR is Prime + 2.75%. Other terms same as above.

Amalgamated Bank - Standard card

  • Annual Fee : None
  • A P R :11.5% V
  • Additional Information : APR is Prime + 6.00%. Other terms same as above.

American Express - Blue Cash 800-600-2583 • www.americanexpress.com

  • Annual Fee : None
  • A P R :10.74%-15.74% V
  • Additional Information : Grace period: 20 days. Cash advance fee: 3%/$5 min./$50 max. Late fee: $15<$100; $29, $100-$1,000; $35>$1,000. Over limit fee: $35. APR is Prime + 4.99%-9.99%.

American Express - Blue

  • Annual Fee : None
  • A P R :8.74%-15.74% F
  • Additional Information : APR is 3.99%-10.99%. Other terms same as above.

Delta Skymiles 800-223-2670 • www.delta.com

  • Annual Fee : $55*
  • A P R :15.74% V
  • Additional Information : APR is Prime + 9.99%. *Annual fee may be waived for first year. Other terms same as above.

Optima

  • Annual Fee : None
  • A P R :15.74% V
  • Additional Information : APR is Prime + 7.99%. Other terms same as above.

Arkansas National Bank 888-226-5262 • www.anbfinancial.com

  • Annual Fee : $50*
  • A P R :7.92% F
  • Additional Information : Cash advance fee: 2%/$5 min./$25 max. Late fee: $25. Over limit fee: $25. *Annual fee waived for Arkansas National Bank checking account holders.

Bank of America - Gold (fixed rate) 800-678-2632 • www.bankofamerica.com

  • Annual Fee : None
  • A P R :9.90%-12.90% F
  • Additional Information : Grace period: 20 days. Cash advance fee: 3%/$10 min./no max. Late fee: $19<$100; $29, $100-$1,000; $39>$1,000. Over limit fee: $35.

Bank of America - Gold (variable rate)

  • Annual Fee : None
  • A P R :13.49%-18.49% V
  • Additional Information : APR is Prime + 9.90%-12.99%. Other terms same as above.

Bank of America - Platinum (fixed rate)

  • Annual Fee : None
  • A P R :9.90% and 8.90%* F
  • Additional Information : *8.90% rate requires a balance transfer. Other terms same as above.

Alaska Airlines Classic

  • Annual Fee : $45
  • A P R :15.49% V
  • Additional Information : APR is Prime + 9.99%. Other terms same as above.

Alaska Airlines Gold

  • Annual Fee : $45
  • A P R :13.49% V
  • Additional Information : APR is Prime + 7.99%. Other terms same as above.

Alaska Airlines Platinum

  • Annual Fee : $75
  • A P R :12.49% V
  • Additional Information : APR is Prime + 6.99%. Other terms same as above.

Alaska Airlines Signature

  • Annual Fee : $75
  • A P R :12.49% V
  • Additional Information : APR is Prime + 6.99%. Other terms same as above.

American West Flight Fund Classic

  • Annual Fee : $45
  • A P R :15.49% V
  • Additional Information : APR is Prime + 9.99%. Other terms same as above.

American West Flight Fund Platinum

  • Annual Fee : $75
  • A P R :12.49% V
  • Additional Information : APR is Prime + 6.99%. Other terms same as above.

Chrysler Rewards Platinum

  • Annual Fee : None
  • A P R :11.49%-15.49% V
  • Additional Information : APR is Prime + 5.99%-9.99%. Other terms same as above.

Dodge Rewards Platinum

  • Annual Fee : None
  • A P R :11.49%-15.49% V
  • Additional Information : APR is Prime + 5.99%-9.99%. Other terms same as above.

Efectiva

  • Annual Fee : None
  • A P R :9.49%-18.49% V
  • Additional Information : APR is Prime + 8.99%-12.99%. Other terms same as above.

Jeep Rewards Platinum

  • Annual Fee : None
  • A P R :11.49%-15.49% V
  • Additional Information : APR is Prime + 1.90%. Other terms same as above.

MilesEdge

  • Annual Fee : $30/$19*
  • A P R :10.24%-18.24% V
  • Additional Information : APR is Prime + 3.99%-12.99%. *Annual fee is $30 if applying by phone, $19 if applying online. Other terms same as above.

Money Return Platinum

  • Annual Fee : None
  • A P R :9.49%-18.49% V
  • Additional Information : APR is Prime + 8.99%-12.99%. Other terms same as above.

Power Rewards Platinum

  • Annual Fee : None
  • A P R :9.49%-18.49% V
  • Additional Information : APR is Prime + 8.99%-12.99%. Other terms same as above.

US Airways Classic

  • Annual Fee : $50
  • A P R :15.49% V
  • Additional Information : APR is Prime + 9.99%. Other terms same as above.

US Airways Gold

  • Annual Fee : $70
  • A P R :15.49% V
  • Additional Information : APR is Prime + 9.99%. Other terms same as above.

US Airways Signature/Platinum

  • Annual Fee : $90
  • A P R :15.49% V
  • Additional Information : APR is Prime + 9.99%. Other terms same as above.

BB&T Bank - Platinum Fixed Rate Preferred (Apply by phone only.) 800-476-4228 • www.bbandt.com

  • Annual Fee : None
  • A P R :9.90%- 10.90% F
  • Additional Information : Cash advance fee: 3%/$5 min./no max. Late fee: $35. Over limit fee: $29. BB&T interest rates are based on applicant's credit history, application information and banking relationship.

BB&T Bank - Platinum Variable Preferred (Apply online only.)

  • Annual Fee : None
  • A P R :9.65%- 10.65% V
  • Additional Information : APR is Prime + 3.90%-4.90%. Other terms same as above.

BB&T Bank - Platinum Variable Standard (Apply online only.)

  • Annual Fee : None
  • A P R :12.65%- 21.65% V
  • Additional Information : APR is Prime + 6.90%-15.9%. Other terms same as above.

BMW Financial Services - BMW Card 888-269-2273, <