Banking News: First PREMIER Bankcard Offers Customer 79.9% APR Credit Card
It has been reported that many banks are raising their credit card interest rates before new federal regulations come into effect as part of the Credit Card Act of 2009, but First Premier Bankcard of Sioux Falls, SD, took it to the next level and is now offering some of their customers credit cards at interest rates as high as 79.9% APR.
The story first broke when San Diego’s NBC affiliate received a report from a viewer that he had received a pre-approved credit card offer from First Premier Bankcard, LLC at with a 79.9% APR. The viewer, Gordon Hageman, said he couldn’t believe it when he got the credit card mail. In an interview with the NBC affiliate, Hageman said, “My first thought, it was a mistake.”
Hageman called the number on the offer, and gave First Premier Bankcard’s customer service agent the offer code and they verified that he was pre-approved for a “Premier Card” credit card with a 79.9% APR. “I think they’re trying to take advantage of me,” said Hageman in his NBC San Diego interview.
The offer was from First Premier Bank, which operates its credit card division as “First Premier Bankcard.” First Premier says on its website that it’s the 10th largest issuer of Visa and MasterCard credit cards. Their website states that their company “focuses on individuals who have less than perfect credit but are actually still creditworthy.”
Hageman has acknowledged that his credit card is less than perfect, but he says that his score is about average. Hageman said that the offer itself didn’t state the interest rate on the card, but he that he had to read the enclosed fine-print disclosure to find that out.
San Diego State marketing professor, Michael Belch, also weighed in on the offer on NBC San Diego’s coverage of the story. Belch stated, “I think you’re beginning to border on deception there They’re just finding different ways to gouge the consumer.”
Although the interest rate that First Premier Bankcard offered Hageman is extraordinarily high, it’s perfectly legal. 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.
First Premier Bankcard has not yet commented to any media source about the story.
How might I acquire an iPad without having those pesky offers or referrals? I've been recently wanting and looking for ...
Great post but complicated to understand since I am from Faroe islands ;-) 
What would be your top three tips for anyone new to this topic?
Uh . . . what is Mr Hageman's 'actual' credit score – tell you what, these people have an inflated view of what their credit score is and trust me NO ONE else is going to offer them a credit card. One sided story.
Once upon a time “USUARY” Laws existed so that predatory companies like the above mentioned could not RAPE consumers. But guess who did away with such laws $ELF INTERESTED POLITICIANS. I'd get a better rate from organized crime! It's sad to know what AMERICA has become a land where Vultures (CORPORATIONS) are allowed to roam freely. WAKE UP AMERICA and FIGHT BACK and fight back by taking and active roll in politics and voting off those politicians (REPUBLICAN OR DEMOCRATIC) who vote against the public well being.
are you nuts!
I live with someone that has poor credit and read the First Premier offers when they come in. In the past the offers had APRs of around 29.9-39.9% until the so-called “credit cardholder’s bill of rights” was passed by the Obama administration. Now these First Premier offerings are asking for 59.9-79.9%. As expected this added regulation of the credit card industry in the end has hurt the consumer. Your post suggests that we should put a cap on rates. After the risk adjustment this would only serve to price poor credit consumers out of the market. Thus they would have to turn to “payday loans” which routinely have APRs of 300%. Your post also suggests that consumers are somehow entitled to credit. Credit is not a right but rather a hard earned privilege. If the government was to guarantee credit card debt for poor credit consumers this would only serve to burden present or future taxpayers. “Taking for producers and giving to losers.”
First off, the majority of the law hasn't come into effect yet. As such, the banks aren't actually being 'harmed' by this until Feburary. Once it kicks in then, we can talk about how the banks are handling it.
Also your statement about 'credit not being a right' doesn't actually help your argument. If credit isn't a right then it makes sense that those with poor credit should simply NOT get offered it at all. Instead of the bank making deals that anyone with any financial sense can see won't work for anyone, just block out these scam deals alltogether. Those that don't have the credit to get a loan at a reasonable rate will just not get a loan at all-since, again, it's not a right.
80% credit cards and 300% payday loans doesn't help anyone, not the borrower who can't pay, not the lender who ends up needing a bailout due to bad loans, nor anyone else who then pays the taxes used to fix the whole mess.
So just put the cap in and let the 'poor credit consumers' get put out of the market. They don't need to be there anyway. Credit ISN'T a right and it ISN'T needed to get by.
SOUTH DAKOTA, the legal rate of interest is 15%, judgments bear
interest at the rate of 12%. There is no other usury limit. There are
certain limitations on consumer loans below $ 5,000.00.
Meaning no limit on usery so most cc are located out of that state where they can charge very high rates.
If credit isn't necessary, why does it matter how much it costs?
This is the same contradictory opinion offered up by a lot of people. It's evil and nobody should buy it… and what's more, it costs too much!
Yeesh.
So you want to be able to borrow cars without “credit” being an issue? How about blaming thieves who steal cars, and deadbeats who don't pay bills? No, it's more fashionable right now to blame the people lending the money.
Pure evil. The day is fast approaching where public outrage at the banking industry will manifest in the most unexpected ways. For now, if you are as upset as I am, please let First Premier know about it! Call them at 800-743-2967 and ask for the credit card department.
The comment regarding “no one else offering them a credit card” is inane. No one SHOULD offer the poor credit. CREDIT = BONDAGE. TO ARMS!!!
If you can't get credit anywhere else, if you really think about it with a small credit limit the finance charges are very minimal or also as a reminder-pay off your balance each month and the 79.9% APR doesn't apply. Not a bad deal in my opinion if you have bad credit to begin with and just trying to rebuild credit…So, before bashing the product….KNOW THE FACTS PEOPLE!! REALLY!!!
GET IT OUT DUDE!!
I actually think this is a good idea. If a customer wants credit so badly that he will sign up for this, let him go. Freedom of choice.
First Premeir is simply making a buck (79.9 bucks per hundred loaned out). If no one signs up, they will eliminate the product or lower the rats.
Personally, I choose not to participate.
Captain America 2009: You are right on target !!!
I guess 79% isn't enough for the bank. They had to add the additional nine tenths of a percent just for good measure.
Ok Captain America!
I have a decent credit score and got the SAME offer … this bank is run by slime balls! To take advantage of people like this is a CRIME … even loan sharks offer a better interest rate! (at least I think they would) … get off your high horse and be real!
By the way …. here are some nubers for anyone who wants them:
First Premier Bank 1-800-603-8383 (credit card call center)
First Premier Bank 1- 605-358-3001 (open during business hours)
Federal Reserve Board 1-888-851- 1920 (they hold FDIC Certificate #6085)
I contacted the FDIC… if it had been earlier in the day, I would have lodged my complaint already. However, I got to my mail late this evening… so first thing tomorrow, I am calling and exercising my right to COMPLAIN as an American!
In today's economy this is tantamount to price gouging in a disaster. If someone is caught price gouging during a natural disaster (for things like water, gas, food…etc…) they can be tried for TREASON!
In my opinion, our economy is disasterous … and this is price gouging…. if it walks like a duck (you know the rest…)
Not to mention, our elderly who may not read all of the fine print?
Not fair and frankly UNAMERICAN!
$100 dollar loan for 1 month $6 with a horrible credit score. just pay the balance in full every month and pay no interest. duh.
This idea of high interest rates was taken from Great Britain and it is a success overseas. If the government is going to make the bank remove or limit the fees, they need a way to recoup money on the risky consumers they lend to. If the consumer pays off the balance in full every month, then they get the best deal – no interest charges and no fees. This story is totally one sided. I work for this bank and am proud to say so. We care about our customers and provide high quality service, unlike Citibank where you have to speak to someone overseas and can't understand what they are saying and then don't get the service you called for.
Simply put, no one is forcing anyone to sign up for the card.
Carl…Lets re state that shall we?
How about… It costs too much for those who can't afford it… Which is why its evil to take advantage of such deceptive fine print. Like many you will first abreviate while forgetting about half the argument… then you will critique. A common tactic for those who want to forget about half the argument.
Randy your on the right track….while talking to the credit card department of my bank, they told me if everyone paid their bill each month the bank would close its credit card division because the bank wouldn't make anything on it. That's why when they see an account that is being paid each month they increase the credit limit to tempt that person to spend to a point where they can't pay regularly so the bank makes money on that account. Actually, this crazy scheme could be the start to all of us going back to operating on cash, by making credit so impossible to obtain we just have to operate on cash. Yes you do need a credit card for such things as renting a car or hotel room, so if this is the only card you can get, you only use it for things like that and focus the rest of your budget on bringing your expenses down to where you can operate on cash and try to even save a bit. I would encourage all to read to excellent books on financial planning 1. The Wealthy Barber by David Chilton and 2. Debt Free Living by Larry Burket.
So you're proud to work for a company that admittedly prowls the dredges of of creditable consumers and offers those who have proven they cannot responsibly handle credit outrageous ways of getting into yet more debt and trouble. I am among those who have poor credit.. I made a lot of financial mistakes and am now paying the price. This seems to me to be no different than a drug dealer pushing his product off onto a know addict. I received this offer at 59.9% and about fell out of my chair.
That is so true. The CEO of Premier BankCard and it's broad of directors should be ousted from the banking industry. I'm sure that the majority of Americans would agree.
While the card is intended for consumers with less than perfect credit it's important to note that First Premier Bank itself is flagged as a high risk credit card issuer with the Fair Isaac Corporation. So having this card does not help rebuild your credit score it actually hurts it. As an alternative I would suggest Orchard Bank which offers a secured credit card that you can open for as little as a $300 deposit. More importantly Orchard Bank is not considered a high risk issuer.
You can find other credit info for small business at:
http://businesscreditblogger.com
While the card is intended for consumers with less than perfect credit it's important to note that First Premier Bank itself is flagged as a high risk credit card issuer with the Fair Isaac Corporation. So having this card does not help rebuild your credit score it actually hurts it. As an alternative I would suggest Orchard Bank which offers a secured credit card that you can open for as little as a $300 deposit. More importantly Orchard Bank is not considered a high risk issuer.
You can find other credit info for small business at:
http://businesscreditblogger.com
I am a former “highly successful” collections representative with Premier Bankcard. Until you have spent the valuable time in subprime collections that i have, it is hard to say that you know exactly how the system works. I will not defend the company, but i can say this; These cards are for people who decided that maintaining their credit was irrelevant to their future goals. Premier provides a card that aids in recovering credit scores over time along with other sound financial practices. The credit limit on these cards is generally $250. When i was an employee, the card was stacked with $172 in fees when you received it. This left about $73 in available credit. The new legislation says that companies such as Premier and Orchard Bank can not charge such fees so the introductory rate makes up for those fees. The cards purpose is not to rack up debt, but rather to show good faith and that a person can make a regular payment. What can you do with a $250 card?? Not much, but you can help repair credit. Also, you would be incredibly surprised at the number of people that actually take out cards like these with numerous companies just to use the intial available credit with no intentions of making a payment. It's a “double edged” sword everyone!
I, as a poor credit risk, applied and recieved a card like this around 10 years ago. I still have it and it still has a $200 limit, a higher than average percentage rate and an annual fee. I seldom pay the percentage rate any more as I generally pay off the total each month, and I have finally figured out to plan for my annual fee so it doesn't run me over-limit (which, of course is another fee). It now sits in my wallet next to other cards with much higher limits and “rewards”, etc. But I keep it a little out of appreciation, because there really was no other way of me getting credit (besides buying a used car for twice the normal price – been there too). It is also the only one I have used on the web. I suggested to my dad he needed a card with a low limit to use on the web and the bank looked at him like he was nuts. I probably couldn't get one now. In any rate, I believe offers like this have a place. What I would like to see is competition and education keeping the rates down. Part of that is thanks to a site like this and posters like all of us. Thanks.
I, as a poor credit risk, applied and recieved a card like this around 10 years ago. I still have it and it still has a $200 limit, a higher than average percentage rate and an annual fee. I seldom pay the percentage rate any more as I generally pay off the total each month, and I have finally figured out to plan for my annual fee so it doesn't run me over-limit (which, of course is another fee). It now sits in my wallet next to other cards with much higher limits and “rewards”, etc. But I keep it a little out of appreciation, because there really was no other way of me getting credit (besides buying a used car for twice the normal price – been there too). It is also the only one I have used on the web. I suggested to my dad he needed a card with a low limit to use on the web and the bank looked at him like he was nuts. I probably couldn't get one now. In any rate, I believe offers like this have a place. What I would like to see is competition and education keeping the rates down. Part of that is thanks to a site like this and posters like all of us. Thanks.
What many people in this country don't want to admit to is the fact that the entire American system (financial, political, educational, religious etc) is biased toward the few. It's no secret that sexism, racism and every other type of oppressive class disparity exists. Many have made comments that either are based on pure ignorance or unadulterated lies. The poor are expected to pay the highest cost for woefully inferior products and services, while the privileged are given credit and breaks for everything. Was bankruptcy created by a group of low-income, undereducated people of color? Ummmmmm…………..not.
What many people in this country don't want to admit to is the fact that the entire American system (financial, political, educational, religious etc) is biased toward the few. It's no secret that sexism, racism and every other type of oppressive class disparity exists. Many have made comments that either are based on pure ignorance or unadulterated lies. The poor are expected to pay the highest cost for woefully inferior products and services, while the privileged are given credit and breaks for everything. Was bankruptcy created by a group of low-income, undereducated people of color? Ummmmmm…………..not.
I really found your blog helpful. Although I know a lot about the topic, I haven’t ever come across the information that you wrote about. Appreciate the post.
Yeah usury is a misnomer in South Dakota.
Do they think anybody will remain their customers…Gosh..These credit cards…
Oh my God…Do they think they would have any customers then….Gosh these credit cards…