Despite reforms in the bank credit card industry cleaning up some of the bad business practices and the establishment of the Consumer Financial Protection Bureau, the bad boys of the business are still on the loose.
South Dakota-based First Premier Bank continues to be notorious for preying on the bad credits (those with FICOs under 600). In the credit card industry lingo First Premier Bank is a “bottom fisher” as opposed to the “prime fishers” (FICO 660-760) and the “cherry pickers” (FICO 760+).
However, if you have bad credit, no cash to pony up for a secured credit card and want to build or re-build your FICO, First Premier has a card waiting for you along with a target on your back.
The really bad deal for consumers is the number of “credit card” website purveyors that promote, and collect bounties, for promoting these rip-off products such as creditcards.com, creditkarma.com, cardhub.com, etc.
The First Premier MasterCard charges a 36% APR for purchases and cash advances. Most applicants receive a $300 credit limit. However, the credit limit is reduced to $225 as there is a $75 first year annual assessed before you can use the card. There is also a $95 one-time processing fee, paid up-front to consider your application. The annual fee after the first year is $45 but a monthly servicing fee of $6.25 per month or $75 per year kicks in. The up-front fee is now considered a security deposit as it was determined to be in violation of Credit CARD Act.
IT GETS WORSE – Each time your First Premier credit account is eligible (after 13 months) and approved for an unsecured credit limit increase, a credit limit increase fee in the amount of 25% of the amount of the credit limit increase will be assessed to your credit account. For example: If approved for a $100.00 credit limit increase, a $25.00 credit limit increase fee will be assessed to your credit account, which will result in an additional available credit of $75.00 on your credit account. This fee is automatically assessed upon approval of your credit limit increase, which could be as soon as your credit account has been open for 13 months.
BUT WAIT THERE IS MORE – If you are approved and once your credit account is opened, your initial cash advance limit will be 10% of your assigned credit limit, subject to available credit. Once your credit account has been open and active for a minimum of 90 days, has two consecutive months of current payment history, is not currently delinquent and has had no return payments for the past 60 days, your cash advance availability may be increased to 50% of the assigned credit limit. Your credit limit will be $300.00; your beginning cash advance limit will be $30.00 and may increase to $150.00 once the criteria above are met.
And there are tons of other fees such as express delivery, cash advance fees, copying fees, wire transfer fees, late fees, return payment fees, foreign currency fees, and e-statement fees..
First Premier has a whole suite of bad credit cards including the First Premier Aventium MasterCard with a 49.9% APR and the First Premier Centennial MasterCard with a whopping APR as high as 79.9%. Both cards have vanished after getting bashed by the news media.
The best way to build or re-build your FICO score, without getting shafted, is to get a secured credit card as well as establishing a checking account and a savings account.