First PREMIER® Bank raised eyebrows late last year when they marketed a credit card with a 79.9% interest rate. The subprime credit card issuer rather quickly ceased this “promotion” but has continued marketing subprime credit cards loaded with fees: program fees, annual fees, monthly maintenance fees, and even an automatic credit limit increase fee that amounts to half of any credit limit increase. And then the offers disappeared.
On www.firstpremier.com, an application link leads to the following message:
“Based on the recent passage of Federal Credit Card legislation, the credit card you showed interest in is no longer available.
If you are still interested in a credit card offer from First PREMIER Bank, please click “Continue” below to apply for the product shown above. Be sure to review the terms and conditions of this offer, as they may be different from offers you may have previously reviewed.”
Following the link leads to an application for the Centennial® Secured Credit Card. To the untrained eye, this may look like an improvement from the unsecured credit cards First PREMIER® recently marketed under the Aventium, First Premier and Centennial labels just a few weeks ago. However, on closer inspection, this is one of the most fee-laden secured credit cards on the market.
Any applicant that fails to closely inspect the fine print is likely to be surprised to learn that this credit card, which carries a $50 annual fee, requires a $200 deposit to establish a credit line that, after fees, is $150. The deposit requirement is buried in the fine print, as are a number of other unusual fees including an internet access fee, an auto-draft fee, and an express delivery fee if your card is lost or stolen.
First PREMIER® Bank is one of the few purely subprime oriented credit card companies remaining. However, it is currently not offering unsecured credit cards; it is offering the same secured credit cards available at most banks and credit unions. And it is harvesting substantially higher fees.
For example, Capital One offers a secured credit card with a $24 annual fee that allows consumers to deposit as much as $3000. This offer doesn’t come with a bevy of hidden fees and, perhaps most importantly, clearly discloses the fact that it requires a deposit on the application page. Other major banks, as well as many credit unions, offer similar terms and conditions to those offered by Capital One.
Consumers with bad credit are unlikely to get a fair deal from any company offering unsecured credit cards; prime consumers are even having difficulty. Thus, consumers with bad credit should look to secured credit cards to help them rebuild their credit. The first place not to look, however, is First PREMIER® Bank. Two months after the CARD Act, their unsecured credit cards disappeared from the market. The secured cards that replaced these offers appear to be no less transparent. Perhaps these offers will soon disappear as well. Until they do, its likely best to avoid them.
-Jeffrey Weber
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