Adobe premiere elements 12 with diamond vc500 one touch video capture device.

Adobe premiere elements 12 and using Diamond vc500 one touch video capture device.
AVI files will not load into Adobe premiere elements 12.
I bought what I thought were the two best software and capture devices.
I am archiving old VHS tapes and using Diamond vc500 capture software called EZ grabber. I thought the best archiving format would be AVI files. As I just started this project. I am willing to do what is needed.
That even being, going and buy another capture device that being for a VCR to PC using a USB are even a Video card.
EZ grabber software ask you to record in what format. I picked AVI. There is DVD - SVCD - VCD - MPG4. I want to archive then go back and edit. The DVD or SVCD format, is that not the same as mpeg 2?
You and I know the drill. Saving in what long term archive format and that dare thing about video compression and losing quality of the videos. Its all a nightmare.
Once again I am willing to buy another capture device for a VCR that will work with Adobe premiere elements 12.
Help please with long term archiving format and capture device.
Thanks

The answer is B.
Capturing the VHS content to computer (via the Diamond vc500 and USB connection and EZ grabber) to obtain an .avi file on your computer and then trying to import that into Premiere Elements with its Add Media/Files and Folders?
When I do that, the Adobe premiere elements 12 crashes or only loads a 2 mins of video.
The firewire connection device "Canopus" product sounds great. But I really don't want to spend that much on my home videos. My PC does not have a Firewire connection. So add a new card for that and the Canopus product. I could just pay someone to do my VHS tapes.
Diamond vc500 $35
Adobe premiere elements 12 $65
Firewire card $50 plus
Canopus $180
$330 is way too much for simple home VHS videos

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