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    Cerulean Discover Credit Card: Ridiculous Fees?

    Don't be fooled; this card is not issued by Discover, that's merely the payment network processing the transactions. The Cerulean Discover card is issued by Continental Finance, which also offers the infamous Matrix credit card.

    So, does the Cerulean card fare any better in terms of interest and hidden fees? Unfortunately, this card is an exact copy of the Matrix card, complete with a high interest rate and shockingly high fees.

    VERY IMPORTANT: If you are looking to build or rebuild your credit, the Capital One Cash Rewards card is a MUCH better choice, offering lower interest rates and a great rewards program that gives you cash back on all of your purchases. I recommend that you use card to build your credit, and avoid the Cerulean Discover all together.

    Here's everything you need to know before you send off an application.

    Very High Interest Rate

    The first with the Cerulean card -- and actually the least of problems -- is the interest rate, which is a variable 29.9%. This is a hybrid credit card so, depending on your credit, you may get an unsecured, secured or partially secured credit card. Unfortunately, this same interest rate applies to each one. This is higher than average for consumers with bad credit and you should never carry a balance with this credit card.

    Fees that Eat Up Your Credit Limit

    The next problem is the annual and monthly fees that come with the Cerulean card. While the Credit CARD Act protects you for the first year by capping fees at 25% of the credit limit, this protection goes away once you reach your anniversary.

    Once you're approved for the Cerulean card, your credit limit will be $300, with a $75 annual fee charged immediately. Your initial credit limit will be only $225, unless you get an additional card, in which case it's only $195.

    After the first year, you'll also face a $12 monthly maintenance fee as well as that $75 annual fee. If you do the math, the means you'll pay $219 in fees every year, more than 2/3 of your credit limit!

    Even More Fees...

    Of course, that isn't the end of the fees you're going to face if you apply for the Cerulean card. Other costs include:

    • 3% foreign transaction fee
    • Late payment and returned payment fees up to $35
    • Cash advance fee of 5% or $5, whichever is greater
    • $30 one-time fee for every additional card you request
    • $30 fee for every $100 credit limit increase.
    • $4.95 monthly paper statement fee.

    While online banking for the card is free, you need to be careful to manually opt-out of the paper statements or you'll be on the hook for this hidden cost, which adds up to nearly $60 a year.

    A good credit card will allow you to request free credit limit increases if you've shown responsible credit use, or raise your limit automatically. With the Cerulean card, you need to pay just to increase your limit. This is not the same as a deposit, either.

    The Bottom Line

    Avoid the Cerulean Discover card at all costs. Credit cards like this with unreasonable fees are not your only option if you have bad credit. If you've had credit problems in the past and you want to repair your credit, search for a secured card with a low annual fee and no hidden costs.

    Your Better Options

    There are plenty of great credit cards out there that prove the Cerulean card is not your only option.

    We highly recommend applying for the Capital One Cash rewards card for those who are looking to build or rebuild their credit. This card is easy to get approved for and gives you 1% cash back on all of your purchases without any hangups or hidden fees.
    Last edited by CreditDave; 03-06-2013 at 11:27 AM.

  2. Cerulean Discover Credit Card: Ridiculous Fees?

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