Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Featured Articles: Mobile New Phone - Getting a New Mobile Phone to Department Of Motor Vehicles New York - How to Save Time and Money at the New York DMV - Youth Resources

Household Bank Card - High-Risk Borrowing with Household Bank Credit Cards

fee payment annual fees

Compared to other credit cards, the Household bank card contains some of the worst fees of any credit card on the market. Coupled with slow payment turnovers, a knee-jerk interest rate, and questionable customer service and advertising practices, this shortcoming makes it a terrible source of credit for the majority of users. There is a use for Household bank cards; however, almost anyone can qualify for it, which makes Household bank an option for those building credit from the ground up.

Household Bank offers five types of credit card: four versions of their platinum card, and a secured card. The various platinum cards range from 7.9% to 15.99% APR, with annual fees that range from $0-$79. The $0 annual fee is reserved for those signing up with the highest interest rate. The secured card enjoys the lowest interest rate and a $35 annual fee.

The fees on a Household bank card are devastating. First and foremost is its $35 annual fee, a surcharge which is assessed on any open account. When consumers accidentally sign up for Household (a process which will soon be described), or when consumers pay off the card but leave the account open, this annual fee will often lead to the card’s high late fee. At $29, a Household bank card’s late fee can be devastating. The same price is assessed to those who overcharge their account, though admittedly this represents a more standard policy on credit cards in general.

The interest rates of Household bank cards are not terrible, but they inflate quickly when a fee is assessed. A missed payment can cause the rates to swell to almost 30% with little recourse. This knee-jerk reaction to a late payment is yet another pitfall to the card, made all the worse by their tricky payment system.

Optimistic clients are prone to disregard the fees and knee-jerk interest. Those going with the highest interest rate do not even have to worry about the annual fee. If payments are made on time, they figure, where is the harm in having higher-than-normal late fees? Where these consumers falter is in the slow turnover rate of their payments: it takes two weeks for Household to apply a card payment. This means that, if the payment is due on July 15th, and a payment is made on July 7th, Household will assess its $29 late fee and increase the card’s interest rate.

Additionally, some borrowers sign up for the card without meaning to. When consumers apply for a Best Buy credit card, they are offered Household as an alternative if the application is rejected. If the application is not watched closely by both borrower and Best Buy employee, the applicant will soon receive a credit card in the mail. Some tuck this card into a wallet to be used in an emergency, some cut it in half, but the net result is the same: the annual fee comes around, which left unpaid results in a late fee and interest rate hike, and soon the person who thought they were applying for a Best Buy card is getting collection calls for $64+ on a card they never used.

The reason Household Bank charges such fees is that they are involved in poor credit lending. While major lenders are competing to offer the best rates to their clients, Household Bank will lend to high risk borrowers with poor credit. This service is in some ways valid, as it can let a borrower rebuild credit.

Rebuilding credit is the proper way to use Household Bank credit cards. The borrower opens an account with Household and uses it once a month, making their payments as early as possible to avoid their stiff late payment penalties. In this way, credit is allowed to recover. As soon as possible, the borrower should close the account in favor of a more competitive card that involves less risk and no annual fees.

For the average borrower, Household credit cards are a poor deal. In providing credit to anyone, their application process is streamlined to the point that some people get Household Bank cards without meaning to. Beyond this, an array of late fees and slow payment times combine to create a convoluted card with which few borrowers are satisfied.

High Sierra Bags - High Sierra Wheeled Backpack—4 Products - High Sierra 22" Wheeled Backpack [next] [back] Darwin Australia Hotels - Hidden Gems in Darwin, Australia Hotels - Best Free-Spirit Family Vacation, Best Bed and Breakfast

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or