Usury Alert! 79.99% Interest Charged by Sub Prime Credit Card Issuer!
This blog has devoted quite a bit of attention to mounting credit card debt in America. As bankruptcy attorneys, we see clients every day who simply cannot afford to carry the ridiculously high interest rates charged by their credit card companies. Credit card debt is one of the leading causes of bankruptcy. In many cases, principal balances on the cards would have been paid in full long ago were it not for a 30% interest rate that assures constant minimum monthly payments for years to come. Clearly usurious interest rates no longer shock me, however, a recent article in Business Week managed to raise even my jaded eyebrows. According to the story, sub prime credit card issuer, First “Premier” Bank is now charging 79.99% interest on credit cards! According to an excerpt from the story:
“Typically, the First Premier card comes with a minimum of $256 in fees in the first year for a credit line of $250. Starting in February, however, a new law will cap such fees at 25 percent of a card’s credit line.In a recent mailing for a preapproved card, First Premier lowers fees to just that limit — $75 in the first year for a credit line of $300. But the new law doesn’t set a cap on interest rates. Hence the 79.9 APR, up from the previous 9.9 percent.”
First “Premier” targets consumers with poor credit who often rely on it to survive. According to the Business Week article, in a mailing sent to prospective customers in October with the revamped terms, First Premier writes “…you might have less-than-perfect credit and we’re OK with that.” The letter notes that an online application or phone call is still required, but guarantees a “60-second status confirmation.”
After such an alarming story, I thought our readers might enjoy a few more articles about the abuses of the credit card industry. Links below:
Why can credit card companies charge such high interest rates?
