The Lesser Evil: Which Credit Card Best Fits Your Personality? - For What It's Worth - Comcast.net Finance

President Obama signed the credit-card "bill of rights" this past May (in short, here's what the new credit-card rules mean for you), but the legislation doesn't take effect until February 2010. Translation: That leaves a big window for credit-card companies to discover loopholes and tricks to get even more out of holders.

We're all too familiar with credit-card issuers' manipulative moves. And their latest antics sure aren't pretty. To start, the new legislation doesn't impose a cap on credit-card rates and fees, so issuers have taken matters into their own hands and are recklessly raising fees. Bank of America, for example, is increasing its maximum balance-transfer fee from 3 percent to 4 percent, and both Capital One and Citigroup are raising card rates for certain buyers. A recent USA Today article urges all credit-card holders to apply an eagle eye to their card’s fine print… especially now as the new law looms and issuers struggle with record-high delinquencies.

But luckily, there's some good news on the credit-card front. A few weeks ago, my colleague Anthony Catalano revealed how to score a balance reduction in his post, "Credit Check." And recently, Bankrate.com unveiled its 2009 Credit Card Study results, which compared the top 10 issuers on late fees, over-limit fees and transfer fees, to name a few. (Bankrate.com found that conditions vary by issuer, not by individual card.)

With 10 common credit-card behaviors in mind (are you a big spender or a payment procrastinator?), we sifted through Bankrate.com's study results to find which credit card is best-suited for each tendency. Read on to see what credit card is the best match for you -- just in time to potentially side-step costly rate hikes and other hidden fees.

1. Big Spender

Do you tend to spend over your limit? Fortunately, USAA's over-limit fee is $0, compared to an average over-limit fee of $32 and the max over-limit fee of $39 (which 7 out of 10 issuers charge). The catch: USAA does not allow cardholders to go over their credit limit. If a cardholder tries to make a purchase that will exceed the limit, the transaction is declined.

However, if you truly feel you need the flexibility to go over the limit now and then (as a last resort, of course), then Discover is your best bet. Unlike most cards, you're in the clear the first time you exceed your limit, but be prepared to pay the second time you overspend.

2. Procrastinator

If you’re often late on your payments, consider USAA Federal Savings. It will raise your rate if you miss two months of "minimum due" payments, but keep in mind that its late fees are fairly high at $35. All other cards in Bankrate.com's study are much less forgiving, as they raise rates after just one missed payment.

3. Prone to Frequent Transfers

Are you frequently transferring money from one account to another? It could be in your best interest to transfer to a Capital One card, which has the lowest balance-transfer fee at 1 percent. The worst: Chase, which announced in June that it's raising its balance-transfer fee to 5 percent as of August 1, making it the highest in the industry.

4. Absent-Minded

If you forget about your minimum monthly payment altogether, go with USAA Federal Savings. It will raise your rate if you miss two months of "minimum due" payments, whereas most other cards raise rates after just one missed month.

5. Fan of the Cash Advance

Are you a frequent user of the cash advance? You can opt for American Express, Capital One, Citi, Discover, FNB Omaha or USAA -- all of which charge 3 percent. US Bank and Wells Fargo are slightly higher at 4 percent; Bank of America charges the steepest rate of 5 percent, and Chase will soon follow BofA's lead.

6. Prefers to Pay by Phone

Most issuers charge a fee for making a payment over the phone talking to a human being, but you can avoid this with America Express, Discover and USAA. A breakdown of other issuers' fees to talk on the phone to a person: Bank of America ($15), Capital One ($14.95), Chase ($14.95), Citi ($14.95), FNB Omaha ($15, unless you have another account with the bank), US Bank ($10 without an account) and Wells Fargo ($12 without an account).

7. Check Bouncer

No one bounces checks intentionally, but that doesn't mean it never happens. Returned check fees range from the lowest of $27 (USAA Federal Savings) to $39, which six of the 10 issuers in Bankrate.com's survey charge.

8. Statement Collector

If you like to see copies of each month's statement, free of charge, go with Chase. If you have good credit, a statement copy is free. On the other hand, if you have bad credit, you'll be charged $10 per statement. Most issuers charge for a copy of an account statement, and these fees range from $3 to $10.

9. Never Pays Bill in Full

If you never or sometimes pay your bill in full, you'll benefit from a grace period. Capital One, Discover, USAA and Wells Fargo offer the longest grace periods at 25 days. US Bank's grace period varies between 20 and 25 days. American Express, Bank of America, Chase, Citi and FNB Omaha have shorter, 20-day grace periods.

10. Terms Violator

Are you guilty of violating your card’s terms of agreement? Bankrate.com found that the default interest rate -- the high rate that a cardholder may be charged for violating the terms of the credit agreement -- is lowest at USAA (11 percent). As for the most costly, these four issuers raise their default interest rate to 29.99 percent: Chase, Citi, Discover and FNB Omaha.

For a more comprehensive rundown of Bankrate.com's survey, check out their findings here.

Have you found a credit card that's a good match for you? Have you been surprised by any hidden fees? Share your opinions here.

Message Edited by Renee_DeFranco on 07-08-2009 08:50 AM