Here's A Credit Card With A 79% Interest Rate
NBC San Diego found a local wine distributor who was issued a credit card with a 79.9 percent APR.
The Premier card from South Dakota's First Premier Bank is responsible for the usurous, loan shark-style rate. The station's Bob Hansen writes:
On its Web site, First Premier says it is the country's 10th largest issuer of Visa and MasterCard credit cards. The site also says it "focuses on individuals who have less than perfect credit but are actually still creditworthy."
"I think they're trying to take advantage of me," said Hageman.
Ya think?
The story says the California Attorney General can't do anything about the card because it comes from an out-of-state bank. Anyone with a Premier card would be wise to check out the fine print on their billing statements.
No, You're Reading That Right [NBC San Diego]
(Photo: Bob Hansen, NBC San Diego)
(Thanks, Galahad!)
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Comments:
Where does it say he applied and was approved?
ordon Hageman couldn't believe the credit card offer he got in the mail.
79.9 because they dont want you to think 80. 80% now THAT would be ridiculous.
Might as well go for 100%.
@nstonep: So what do you get for that annual fee and interest rate? If it is like a 20% discount on wine, it would actually save me a lot of money. Of course, I would never run a balance on it.
@Mozoltov, motherfucker: Or more. Remember that payday loans are frequently more than 300% APR. It just doesn't seem like that because they ask you to pay back in two weeks, but in terms of APR, it's ridiculous.
First premiere sent me one a month ago with 19.9%,
Still highway robbery!!
@Fresh-Fest-1986: I saw this article linked somewhere else last night - did you notice they put 79.9 instead of 79.99? I'm wondering if they're targeting people quickly glancing at it and thinking it's 7.99%. Yeah, you'd have to be pretty dense, but I'm sure there's people that would overlook it.
@DoubleEcho: No wait...if it's variable it could very well go into the 80's. Phil doesn't really say.
@TCama: Yeah one of my coworkers was telling me about it yesterday, he got a payday loan and immediately afterwards he regretted signing for it. he says it's been 3 years and he is still paying interest on it. Nice guy but he needs some money counseling, because he is digging himself into a hole. Maybe he should stop partying so much and going to strip clubs.
I like it. A lot.
Having a 79.9% interest rate credit card during a financial meltdown is like driving around in a Hummer when gas prices spiked up to $3.99.
Pure. Brass. Balls.
Sign me up!
Welcome to a preview of what it'll be like if we allow medical insurance companies to "compete" across state lines, where the worst that 50 states can offer becomes the default for the entire nation.
And, BOY is that poor market segmentation: Oenophiles and subprime credit card holders?!
Eighty percent is cheaper than what a loan shark wanted to charge people...thirty years ago. Come to think of it, the owner of Cash4Gold looks a lot like a loan shark I knew thirty years ago. ;)
If they gave me that card with a, say, 25% cashback program, I would use it in a heartbeat. Let the suckers who float a monthly balance at 79% subsidize my free (deadbeat) money.
@AthronofEryndor: Spiking to $3.99 what year do you live in? In Southern California I saw it get as high as $5.99 (but to be fair that was a rural gas station in the mountains)
Exactly. It's an offer. It's not the card issuer's fault if you're dumb enough to accept the offer...is it?
@wcnghj: SD has no usury laws thanks to Wild Bill Janklow who repealed them all decades ago to entice Citibank to move their credit card operations here. The entire state economy has been propped up artificially on the predatory credit card industry for a very long time.
People in the state are not happy with First Premier's antics. They have some of the worst practices in the industry. The guy who owns First Premier has donated billions to one of the local hospitals for a children's hospitals and a research facility. It is going to take much more than that to undo the bad karma he has going on.
@Tristan Smith: We had $5.99 in South Dakota also. Just great when there is no public transit to speak of and we have a huge amount of working poor.
@bohemian:
I don't think it matters when a credit card issuer is located in a state. Because of the nature of the business (loaning to people outside the state through revolving credit lines) it's federal law that applies. I'm just saying there's no FEDERAL law that addresses usury at this point even though there are common law (state law) applications where the court will disregard stated interest and impute interest based on a market rate (for a similar customer). Usually this is between businesses as far as I know. A court would be hard pressed to find a person worthy of 80% interest, I don't think Madoff would even qualify.
Even Providian who charged set up fees and application fees and a yearly fee didn't charge that much interest and I don't even think they're around now.
@Trai_Dep: Let's break this argument down:
* This credit card's 80% interest rate is certainly the worst I've ever seen, and presumably it can be obtained by a person in any state.
* Somewhere there is an insurance company that is the worst in the country.
* If Americans are allowed to shop across state lines for insurance, the worst insurance company in the country will become the default.
Now, your argument would be valid if most people in the country were carrying around cards with an 80% interest rate. However, that's clearly not the case, or this absurd interest fee wouldn't be newsworthy.
Your attempt at tying this unrelated story to the national healthcare debate has failed...
It hit abouts high 3s, low 4s in the greater Atlanta area. There was chaos in the streets! There were *gasp* SUBURBAN WHITE PEOPLE WHO HAD TO TAKE MARTA TO WORK!
Aside: This is the first time I've ever lived in a metropolitan with even a vaguely acceptable mass transit system (before: Michigan boonies, then Detroit), and fellow colleagues look at me like I'm a poltergeist when I tell them that, yes, I do in fact use the mass transit system.
@DoubleEcho: I hadn't considered that but it does make a lot of sense. Most people fill out these "Specialty cards" or whatever you want to call them very quickly and most of the time would just quickly glance.
My wife used to work at a Macy's and they made her push their cards. She said people would sign their name without even looking at anything in the form, just grab, signature, done. Crazy. Who could have imagined a credit issue, my ass.
This card is intended for people who would get upset at a rate increase sometime in the future. With this card you can almost guaranty no rate increase.
@DoubleEcho: Between your point and Fresh-Fest-1986's about it not being 80, I think you're both correct.
The story says the California Attorney General can't do anything about the card because it comes from an out-of-state bank.
this is the one thing that i really wish feds would change in regards to financial products, but i don't know if they can. a national charter should not give you a right to circumvent state banking laws. as a financial institution, or a company that provides financial products, you should have to follow the respective laws in every state that you do business in. is it any different for contractors or CPAs or mortgage brokers? no. why should banks (& companies that provide bank-like services) be allowed to circumvent regulation in this way?
@wcnghj: South Dakota's gotta do something to get people to stay there. You can only make so much revenue from Mount Rushmore and the Corn Palace, so they took a tip from delaware
Maybe he should stop partying so much and going to strip clubs.Now that's crazy talk.
@secret_curse:
"Those credit card rates are ridiculous! They're all retarded, I'm just going to not get one and live life just fine."
"Those health insurance exclusions are ridiculous! They're all retarded, I'm just going to not get health insurance and live life--- ACK!" *drops... either dies or goes into bankruptcy after getting picked up by an ambulance*
@nstonep: Nationally chartered banks are subject to federal law and the laws of the state where they are located
I get these offers all the time (I'm in a credit rebuilding stage myself after defaulted student loans). They go in the trash. I live CC free and fare well with it. One day I may get another credit card. Right now, it's not necessary.
So be highly suspicious of credit card offers from South Dakota.
And I thought they were all congregated in Delaware.
This is still a better APR than an overdraft fee
According to the part of the photo we can actually see, that's the cheque/cash advance rate, not the standard rate. It's normal for the cash advance rate to be quite large. I'm curious as to what the standard rate actually is.
@wcnghj:
Which is why we need a NATIONAL usury law. Problem is these crooks have great lobbies in state governments.
@nstonep:
Wouldn't that be cross state lines and thereby the jurisdiction should fall on the card the company is doing business IN? This is a very silly distinction.
@secret_curse: Except that people have more say in their Credit Card matters than they have in health insurance matters.
If it didn't have that $75 annual fee, I'd be tempted to sign up for it. I never carry a balance, so the interest rate is irrelevant to me. I'd love to tell people I use a card with an 80% interest rate, just to see the reactions. :)
@LoadStar: But isn't the cash advance rate usually significantly greater than the rate for purchases?
The businesses you mentioned all have a physical presence in the states in which they do business.
(I don't agree with any of it, just pointing out that this is why/how they're allowed to circumvent state laws.)
@AthronofEryndor: People were able to take MARTA to get to someplace useful?? Now THAT sounds like a story.
@Sockatume: I assumed the word ending is "s" was "Cheques", which are usually charged at the same rate as the cash advance.
@AthronofEryndor: $3.99? Four and a quarter here in the mid-atlantic.
The folks with the big brass ones drove the Hummer, or the Navigator or Expedition, never got a speck of dirt on it since they never needed it to go off-roading, bitched about the high gas prices, then proceeded to crash it during the first snow storm of the season because they thought 4-wheel drive was a note from God saying they would have traction in a snow and ice storm.
@nytmare: Or - I dunno, just a thought - RTFM before you get the damn card.
I mean, really - this bank is out in the APR stratosphere, but they have to post their fees up front.
80% and a 75 dollar annual fee. We have a winner for the usury olympics! I still can't fathom why credit card companies aren't subject to usury law.