Such a deal! New credit card offers a mere 79.9% interest

It's like some credit card companies want to be ridiculed. What else can you say about a company offering a credit card with a 79.9% APR?

At first, I thought it was a joke or a misprint. But then I saw it confirmed in no less a reputable source than American Banking News, and realized that--Oh. My. God. It's true. Yes, First Premier Bank is offering a "Premier Card" credit card with a 79.9% APR.

Yes, 79.9%.

San Diego's NBC affiliate broke the story when alerted by a viewer Gordon Hageman, who told reporter Bob Hansen, "I think they're trying to take advantage of me." Hageman's retort: "Ya think?"

The comments among WalletPop writers were along the same lines. WalletPop regular Zac Bissonnette offered some words that my editors would censor if I repeated them here, but he did see one bright side: "79.9% is one HELL of an incentive to pay your balance in full each month."And Josh Smith, also a regular presence on WalletPop, chimed in: "You would be better off paying for stuff with buttons, shiny rocks and berries than using a First Premier Card."

Josh added that he received a pre-approved offer from First Premier in the mail, and that it's not just the interest rate that's insidious; the fees aren't so hot either.

The fees include:
  • $29 Account Setup Fee
  • $95 Program Fee
  • $48 Annual Fee
  • $7 Monthly Servicing Fee ($84 a year)
  • $20 Additional Card Fee
Smith adds, "With the card they sent me, the limit was $250, so by opening the card, I would have already been left with $50 in credit. What the hell can you buy for $50 that you couldn't pay cash for?"

And if you're wondering if this is legal, yep, it sure is. As American Banking News says, "Credit card interest rates are regulated on a state-by-state basis, and South Dakota removed the ceiling on the interest rates that credit card companies can charge in hopes of attracting national banks to the state."

All I can say is that if you've received an offer for this card from First Premier, rip it up. Please rip up this rip-off.

True, as my colleague Zac reasons, having this card "might actually be better than having a low interest rate because it encourages you to live within your means." (FYI: In case there is any misunderstanding, Zac is NOT recommending the card.)

He's right on that point. The problem is that nobody who accepts these terms is going to be the kind of person who has a history of routinely paying off their balance. The ideal person for a card like this is someone who is desperate and who feels that financially, they have no options left. I know, because I've been that person.

So if you're thinking of signing up for this card, let me talk you off the ledge.

This is the worst credit card offer I've heard of yet, by far, and the worst that probably anyone has ever heard of. Most of the worst deals come out around 30% APR, and this, of course, is well over double that. And as Josh pointed out, the fees are ridiculous. It may temporarily feel good to get the card, but I have a feeling that feeling will last less than a day, and certainly no more than a month. Once that first bill comes in, and you're looking at the fees and the interest rate, I can't imagine you'll think anything other than, "What the heck was I thinking?"

Predatory lending firms are called that for a reason, and this product preys on the last people who should be getting a credit card with a 79.9% APR.

I can't see any upside in taking this offer at all. If you feel like you need some sort of credit card, and this is your best option, then you'd be better off just going to the National Foundation for Credit Counseling and working out your debt problems with them, and getting not just counseling but enrolled in a debt management program, before one day you wake up and realize your only real option is bankruptcy.

But, hey, aside from that, it's a great card.

Geoff Williams is a regular contributor to WalletPop, mostly writing about banking issues. He also is the co-author of the upcoming book, Living Well with Bad Credit.
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