79.9 Percent Interest Credit Card From First Premier Bank Skirts New Regulations

Source: Huffington Post

NEW YORK — It's no mistake. This credit card's interest rate is 79.9 percent.

The bloated APR is how First Premier Bank, a subprime credit card issuer, is skirting new regulations intended to curb abusive practices in the industry. It's a strategy other subprime card issuers could start adopting to get around the new rules.

Typically, the First Premier card comes with a minimum of $256 in fees in the first year for a credit line of $250. Starting in February, however, a new law will cap such fees at 25 percent of a card's credit line.

In a recent mailing for a preapproved card, First Premier lowers fees to just that limit – $75 in the first year for a credit line of $300. But the new law doesn't set a cap on interest rates. Hence the 79.9 APR, up from the previous 9.9 percent.

Read more: http://www.huffingtonpost.com/2009/12/17/799-percent-interest-cred_n_396191.html

You deserve what's coming to you.

Would be for someone with less than great credit, who got the card as a last resort, and in doing so was certain they would pay the balance off every month, and render the ludicrous interest rate irrelevant.

Of course the only purpose in that would be to re-establish "good credit" but if this idiot bank didn't make any money off you, they would probably cancel your card. They sound like the type who will find a way to screw you one way or another.

I just can't believe anyone would actually sign up for this. You'd be better off just waiting for your credit to repair itself.

4 years ago when I was trying to qualify for an FHA loan, the finance folks at the real estate office suggested I take out one of these cards, use it ONLY to put gas in my car twice a month, and pay it off entirely each bill cycle. I did just that and I still have the card. It's helped me raise my credit score by having 'available credit' and also its nice to have on hand in the event of an unexpected dr's office co-pay or late night vet visit. And with a limit of $250, I can't get myself into an insurmountable hole.

You just have to learn extreme restraint and only use it when you know you can pay it off almost immediately.

Either people will yell and scream because they cannot get credit or have no opportunity to "repair" their credit or it'll be labeled usury. See post 16 for an interesting anecdote.

Unless you count gangsters.

then no one will sign up. Right?

I said there was no crying out from anyone but gangsters and professional lenders for 79% interest.

I do think that some people are enough credit risk to warrant 79% interest, but I wouldn't want to be the one lending to those people. :)

First let me say that I'm leaving shortly and I'm typing on a cell phone, so answering may be difficult.

In my 20s I was, shall we say, "not responsible." I spent most of '93 living in a truck and following the Dead, for instance. Time rolls by, I've got my act together, a real job with insurance and good pay and I could even afford to miss a paycheck or two before life goes to hell.

But all those years came with a cost: bad credit. Its hard to get a cellular phone or an apartment. They raised my car insurance rates (though I've never missed a payment in 7 years w/ the company) because apparently bad credit equals bad driving. Can't get a gym membership w/o paying years up front. Mortgage and car dealers charge exorbinant interest, and probably rightfully so, since I am a risk.

I'm incredibly responsible these days, but no one will give me credit. One regular company rejected me not because of my score, but because they no longer issue new cards to anyone in Clark County, NV. So, to rebuild credit, I took out a 1000 loan at the bank and got the first premier card, and paid my student loans on time. My score has gone from 580 to 695 in a year, but credit companies now want a score of 750 or better (before last year the cutoff was 700 ot 720. Anyway, the company gouges me, but if I want to live in the 21st century this is the price I pay.

Eugene? Las Vegas? I was in Oregon in June 1993, and I crossed paths with the followers as they made their way north from California. I did not attend any of the Eugene shows. I should have, as there were tickets available for at least one show.

a good credit score. But there are some things you can do to help yourself get better deals. Join your local credit union they appreciate on time payments. They offer family and friend plans, some have their own car lots of previously owned vehicles at deep discounts.They have credit cards also.And they report to the major credit reporting agencies.And most of all it is owned by the members.And there will always be a bright smile when you walk in the door.

Sorry, I can't agree with that.

"A fool and his money are soon parted."

exploitive and oppressive and we should all fight to put an end to it rather than "blame the victim" as deserving.

True story: Some girl in the target parking lot(cute too) told me that she had run out of gas and wanted to sell me a DVD for a couple of bucks. I guarantee someone or many someone's bought that DVD.

Typically, victimizing people is illegal--and should be.

you remember the one, Cary Pagent or something like that? Was it a DVD of her?

scamming for a couple of bucks... versus placing folks who may have little financial education (per reading and understanding the small print, which I would bet is not explained clearly in any conversation with reps from the credit card companies) into a near 80% interest rate... is similar exactly how?

Usury like this should be a crime.

People desperately want heroin, too, but we still don't let pushers off the hook.

Credit card issuers were sending credit cards in the mail to everyone under the sun, including doggies and babies, at interest rates a lot lower than 79%. Despite all the defauts, they still made money. So, let's not pretend the only way to repair anyone's credit and still stay in business is by charging 79% interest.


Besides, you yourself posted on this thread that simply waiting until credit repaired itself would probably be better for the borrower.

But it won't stop people from screaming that credit isn't available to them. Personally, I think we have to get VERY strict on CC lending and mortgage lending. I don't think any home loan should ever be offered without AT LEAST 10% down. When I say this to people, they think its ridiculous though.

sociey has to legalize providing those things.

I was just speaking in terms of public reaction. People have gotten used to "easy" money ie loads of credit.

It started with interstate banking so that banks in well regulated states could base their headquarters in a state with less regulations (ie interest caps) and be exempt from the stringent states regulations. Suddenly the only rules applied were those of the state the bank headquarters were located in. Then states started changing their legislation to entice banks to relocate. For a while, there was competition between states as to who could be the most laxed, most accommodating to the banks.

Been sliding further away from consumer protection (that's what strict lending requirements were all about) within the banking industry since the early 80's.

is that you basically create two classes of people. Those that can afford homes and those that never will be able to afford a home. I still think its better than the current "easy credit" mess.

to apply for this deserves to be financially destroyed by it for the rest of their lives?

That a brutal and despicable attitude. x(

This should be illegal.

I could not have stated it better.

I am. I'm just pointing out how this will be screamed about.

part of the article says that the other card companies can follow this example.

Call-in 'anti' card campaign necessary.

of how fully owned our politicians are by corporate interests, do you really think that any bank is the least bit afraid of legislation right now? :(

(excuse me, I just vomited a little even just writing that)

In the same way that the free market of mortgage securities trading regulated itself...

derivative securities, with AIG insuring the investors?

"It's deja vu all over again." Yogi Berra

it's like most things, when someone ain't watchin', funny things happen

If we done it, dey'd trow us right in jail.

We need one of dem--whatcallits. Lobbies.

...the Health Insurance Cartel needs only to look at this example as evidence of how effective those new "regulations" are going to be.

The loopholes have already been inserted.
The army of lawyers are already organizing their defenses.

The individual forced consumer of the invisible product of the Health Insurance Cartels doesn't stand a chance.

Anyone what to hazard a guess?

to prop up investors and the stock market. :(

You know, because social security is always supposedly on the verge of insolvency. Government has to mandate some kind of alternative in order to protect us all from having nothing in our old age.

:eyes:

If it were tangible, it would have some benefit to the Working Class who would have to actually make something and retail it.

It WILL have to be another imaginary product like Private Health Insurance that creates NO WEALTH, provides NO service, only benefits the Corporate Ownership Class, and leaves Americans with absolutely NOTHING to show for their money.

They wanted 80%, but got jawboned down to just 79.9!

Yay!

Things like this are what forced me to become an atheist. No one in the universe cares or is looking out for us. Here's the proof.

The bad people will pay for their transgressions in the afterlife. Carry on.

:hi: :sarcasm: :hi:

They never did read what Jesus had to say about caring for the poor.

Their greed will be their downfall. 30% was already ridiculous, but it's hard to imagine anyone thinking that 79.9% is fair.

"First Premier said the 79.9 APR offer is a test and that it's too early to tell whether it will be continued"


I assure you there is a fool out there somewhere who will use this card knowingly.

I'm seriously beginning to think that the banking and credit industries are nor merely the sacred cows of the D.C., but of some posters too.

this about a month ago. it may be two.We already warned DU members that the cards were already to use and only had to be activated. We also warned members that they were targeting moderate to low income working people and seniors. So i know this is no suprise. Oh by the way has anyone checked their health care premiums or co pays lately.Mine went up. Talked about that about a month ago also. When you read these post some of them are so you can be aware of things before the hit the mailbox of your front porch.And so you can warn family and friends.