Web Extra: Credit Cards That Will Cost You

Not all credit cards are created equal. Plenty of cards look attractive on the surface with their bells and whistles but can end up costing you way too much in the end. For example:

Airline rewards cards. The interest rate on rewards cards is almost always higher than non-rewards cards, says John Ulzheimer. And, in many cases, you have to spend exponentially more to earn a reward than it would cost you to buy the reward outright. For example, a round trip ticket from Atlanta to just about any city in America is less than $500. In order to earn enough points to redeem the value of that ticket, you would have to spend between $25,000 and $30,000.

Prepaid and secured cards. Be very careful, Ulzheimer advises. Some are fine, but some are so loaded with fees that they eat away at the stored value (on the prepaid) or the modest credit limit (on the secured). Choosing the wrong secured card can result in 30 to 50 percent of your limit going right to activation fees.

Cards that don’t report to all three credit reporting agencies. They may not cost you anything extra initially but they will cost you in the long run, according to Ulzheimer. Choosing a card that doesn’t report to all three bureaus keeps your sold and responsible credit management a secret and your FICO score can’t benefit. You want your credit score to have as much positive information associated with it as possible.