NET MAKES
SHOPPING FOR CREDIT CARDS EASY BUT CONSUMERS NEED TO
BE WARY OF CERTAIN DEALS
By Dolores Kong
04/16/2000
The Boston Globe
Credit cards have let consumers shop on the Internet
for everything from books to CDs, clothing to
groceries. So it seems only natural for the Internet
to let people shop for credit cards online.
A slew of Web sites do just that, enabling comparisons
of credit cards based on everything from interest
rates to annual fees, travel rewards to cash and
product rebates.
The most comprehensive sites list hundreds - even
thousands - of credit cards. Some offer calculators to
figure out which card is best for you, based on your
spending and payment habits. And others provide such
useful consumer information as debt management advice
for those with high balances and a comparison of
different credit cards' foreign currency exchange fees
for those planning to travel abroad.
There are even sites offering so-called Internet
credit cards. Issuers of such cards allow you to apply
online - one even promises approval in seconds. They
also give you access to your account on the Internet
and online shopping discounts and guarantees. Among
such cards: NextCard and Blue from American Express.
But consumers should read the fine print, as with all
credit card offers, whether made online or in paper
form, said Stephen Brobeck, executive director of the
Consumer Federation of America, an advocacy and
educational association of more than 260 consumer
groups.
"There are some risks," he said. For instance, some
sites may target you for additional marketing, and
some may have financial relationships with the issuers
of credit cards they are pitching.
"It's awfully hard to warn people about every site
that may be marginal," Brobeck said.
While he couldn't name names of questionable sites,
Brobeck did recommend two sites for their objective,
comparative information: www.bankrate.com and www.Card
Web.com.
"In general, the comparison shopping sites - the sites
that list information about several products - are
worth viewing," Brobeck said. "They provide a very
useful service."
Robert B. McKinley, chief executive of CardWeb.com, an
outgrowth of a credit card industry research group
that has been in business since 1986, offered this
advice in assessing Web sites listing credit cards:
"What you should do as a consumer is click through the
site; read about the company and the mission
statement. How broad is their list? 10? 100? It
doesn't have to have thousands."
And before you apply for a credit card online, you
should make sure the site is secure and your
information is not going to be shared or used for
marketing, McKinley said. You should also remember
that credit card deals - even those available online -
usually depend on your credit history.
Despite the cautionary notes both Brobeck and McKinley
sounded, they agreed the Internet can be a great tool
for consumers in the market for a credit card. "You
can get good deals. It is worth it," McKinley said.
But, he added: "Just like in the real world, proceed
with caution."
Here is a review of what some sites offer:
- www.bankrate.com: At this site, you can find the
best credit card deals based on whether you carry a
balance, always pay in full, or want frequent-flier
miles and other rewards. There are also calculators to
figure out the best card for you and how much it costs
to carry a balance. Also of interest: An article
comparing credit card issuers' foreign exchange fees.
- www.CardWeb.com: This serves as the source of the
monthly comparative credit card charts that run in
such publications as The Wall Street Journal and the
Los Angeles Times. Here, you can find the best cards
available to students, to people with poor or no
credit, or to businesses. You can also search among
the hundreds of cards in the database for those
offering no annual fees, rebates and rewards, and high
limits.
- www.CreditCardMenu.com: Part of a company that calls
itself gromco - or Get Rid of Mental Contamination -
this site prides itself on being uncluttered and easy
to use. Consumers can apply for each of the
approximately 20 cards featured here. A summary
accompanies each card describing rates, fees, and who
would benefit the most from the card. The site,
formerly known as CreditCard Advisor.com, also offers
a calculator that compares credit cards based on your
spending and payment patterns and debt management
advice.
On the page disclosing its privacy policy, the site
says it tracks the domain names from which people
visit for research purposes. But under the heading
"business relationships," the page merely says the
site contains links to other Web sites, without saying
what the nature of the relationships are.
- www.CreditCardFreedom.com: Using a star rating to
evaluate credit cards, this site says it assesses
cards based on such factors as interest rate, annual
fees, cash rewards, and gasoline rewards. It also
offers a calculator to figure the percentage of your
income going to credit card payments, so you can
assess your indebtedness.
But consumers may want to view some of the products on
the site with a skeptical eye. While the site says it
is "designed to offer an educational and informative
service" and "has no affiliation with any of the
companies listed, or the credit card products," it
lists one exception: "affiliate programs that
advertise their products or services throughout Credit
Card Freedom, either through banner advertisements or
direct links."
- www.CardRatings.org: This Web site was started two
years ago by a grass-roots Arkansas-based consumer
group called Citizens for Fair Credit Card Terms. The
group says it is not affiliated with any bank, credit
card, or government agency, and independently
evaluates cards, even those offered by site sponsors.
Indeed, a banner ad for a clearly identified site
sponsor, NextCard, steers the user to a note about the
card recently discontinuing its double reward points
program.
Aside from listing cards offering low rates and
rewards, the site provides several useful calculators,
a free credit report, updates on the latest card scams
to watch out for, and debt-relief information. In the
interests of full disclosure, the site says part of
its proceeds go to support contemporary Christian
singer Amy Grant's favorite charities and provides a
link to them.
- www.CreditQuotes.com: Part of a Norwood-based
company called Microsurf, this site says it is an
independent source of credit card information with
listings for over 1,000 credit cards. It also says
your information will not be used for marketing, and
that there are no hidden fees. Unfortunately, the page
detailing the site's policies for "honesty and
integrity" was "under construction" during this
review. The site allows you to compare credit cards
based on whether you carry a balance, charge
everything, have poor credit, or want to support a
school, company, or organization.
One of the neatest features: Each card listing
features a calculator icon, linking to a page that
allows you to figure out how much in interest you
would pay based on your particular spending and
payment habits and the card's interest rate. There's
also a magnifying glass icon linking you to a
description of each card's fine print.