First Premier Bank Charges 80% Credit Card Interest
Sunday, December 20, 2009
For those consumers who want to know what it’s really like to be gouged by a credit card company, check out First Premier Bank. The subprime credit card issuer is experimenting with a new card that hits customers with a 79.9% interest rate.
Yes, 79.9%.
The card used to come with a 9.9% rate, but now that the government is forbidding excessive fees on credit cards, First Premier is attempting to recoup its money through a different means. Until now, the company levied $256 in fees in the first year for card holders—who received a credit line of just $250. But starting in February, the new federal law will cap such fees at 25% of a card’s credit line. No restrictions exist, though, on interest rates.
“It’s the highest on the market,” credit card analyst Anuj Shahani told the Associated Press. “It’s the highest we’ve ever seen.”
First Premier intends to market its new 80% interest-bearing card to people with bad credit who can’t get cards anywhere else.
-Noel Brinkerhoff
Credit Card's Newest Trick: 79.9% Interest (by Candace Choi, Associated Press)
No, Your’re Reading That Right (by Bob Hansen, NBC San Diego)
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