The Credit Card’s Newest Trick: 79.9 Percent Interest

PremiereBankCandice Choi writes on the AP via Yahoo News:

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.

“It’s the highest on the market. It’s the highest we’ve ever seen,” said Anuj Shahani, an analyst with Synovate, a research firm that tracks credit card mailings.

Read More: AP via Yahoo News

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  • 5by5

    Does this guy also wear shiny suits and break noses? Because at this point, he's basically just a glorified loan shark.

    Actually even a card at 20% interest is loan sharking, because you have very little chance of paying that off, but 80% interest? Gimme a break. That's just criminal. It's beyond criminal, its a sin — its usury.

    The CEO oughta be prosecuted for rampant hubris.

  • honu

    With a bank so blatantly showing their hand at doing an end around government regulations, I'm hoping there will be a backlash and people will both shun the credit card and those with First Premier Band credit cards already will close their accounts. F these motherf'ers

  • James T.

    Where do they find these white bread asshole CEOs? Is there a mill somewhere?

  • GoodDoktorBad

    Dykhouse, the name says it all.

  • saint_al

    Chase acquired Washington Mutual after their collapse~ my old WashMu account suddenly jumped to 29.9% APR. Similar shit has happened to lots of people. Now I'm sending payments to a closed account @ Chase, whom I never wanted to deal with in the first place. : P

  • Randy the Ram

    I worked for this bank a few years ago. I quit since I could not handle the upset customers. They give cards with a $250 limit and $178 when it is open.

  • http://twitter.com/thenewalvinshow Al

    I've been (according to them) “rebuilding my credit” with a First Premier Card: $49 annual fee, $7 a month. After reading this, I called to cancel the card. I had to listen to a bunch of scripted “well, that 80 percent interest doesn't affect you” and “longevity blah blah credit report blah blah” stuff. When I continued to press for canceling my card, they offered a $45 credit to my account, essentially enough to pay my monthly service fee for the next six months, so I could “decide then” whether I wanted to cancel or not.

  • Bing

    The only difference between a criminal and anyone else is that they got caught.

  • Bing

    The only difference between a criminal and anyone else is that they got caught.

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