ICFE eNEWS #12-24 - December 3rd 2012
Credit card comparison sites evaluated
Only 13 of 54 sites met 'useful and complete' criteria
With the rise of the Internet, comparing credit cards has become a business model for dozens of companies. Card comparison sites make money when consumers click through and apply for a card. Consumer Action looked at 54 sites to determine which ones offer the most useful and complete information to credit card shoppers. To narrow the list, we evaluated them using a checklist of key elements - and 13 met all or most of our criteria. Three sites met all nine criteria (Card Hub, CompareCards.com and CreditDonkey). But even these 13 don't include all credit cards, so it pays to not limit your search to comparison sites. (Link to survey.) Surprisingly, our search results show that the same or similar credit cards from the same top five issuers tend to dominate searches on many sites. For example, out of 21 results for "zero percent" balance transfer offers, the Discover More card showed up 9 times, the Capital One Platinum Prestige card four times and Chase Slate three times. In 24 results for "cash back" card offers, Capital One's Cash Rewards turned up six times, Discover More card five times and the American Express Blue Cash Everyday card four times. "It was strange how the same cards cropped up again and again on various sites," notes Linda Sherry, Consumer Action's director of national priorities. "Sometimes their rankings varied and the deals differed slightly, but it appears certain cards dominate their fields." Consumers won't find any offers from top card issuer Bank of America. The bank said it does not pay fees to referral sites, so anyone interested in a BofA card should visit the bank's website or a local branch. Consumers probably won't find offers from local banks and credit unions on card comparison websites, either.
Slim pickin's for those with bad credit
Search results on the sites for consumers with poor credit are overwhelmingly secured cards (requiring a deposit) and prepaid cards (not a form of credit). Alarmingly, our "poor credit" search results turned up high-cost unsecured cards targeting those with a poor credit history, and shopper cards, like Horizon Gold, which are not general-purpose credit cards. Shopper cards do not improve a credit record or even report payment history to a credit bureau.
Beyond search results
We found that most comparison sites offer some great features--a free credit score or credit score estimator, financial calculators, a wide range of search filters, side-by-side comparisons of search results--balanced consumer education, and a cache of articles on a wide range of credit-related topics. In fact, consumers may uncover some of the best credit card deals in the articles posted on a comparison site rather than in the card offers. (That doesn't mean that the card offers shown won't be a good fit; they just may not be the deal that suits you best.)
Consumer Action's detailed survey results and key criteria
chart, as well as articles on how to get the most out of card comparison
websites, are available
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Consumer Action empowers low- and moderate-income and limited-English-speaking consumers nationwide to financially prosper through education and advocacy.
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Institute of Consumer Financial Education (ICFE)
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