The Balanced Spreadsheet-Financial News, Budget Advice, Debt help, Financial Tips, and other advice

February 16, 2010

Update to 79.9% Credit Card

Filed under: News Review, Personal Finance, Uncategorized — Tags: , , , — thebalancedspreadsheet @ 2:32 pm

Back in December I commented on First Premier Bank and their 79.9% APY subprime credit card that is being marketed to those who have very poor credit.  Well with the new credit card laws going into effect soon, First Premier is back in the news.  So far the response to their new card has been greater than anticipated:

“Has First Premier gotten any takers on the 79.9 percent cards? [CEO Miles Beacom] called the response ‘phenomenal,’ adding 2 percent of people receiving the offers have applied for the cards. Their normal response rate is 1 percent to 1.2 percent, he says. ‘It’s double what our normal product was.'”

“‘Our goal is really to keep these lines controlled because these are people who have had problems in the past,’ Beacom says. ‘It’s really to help build up the discipline without them getting into credit trouble again.'”

Not getting this card in the first place would be a better act of discipline in my opinion.  Hopefully, the 2% application rate is an inflated statistic as those who apply for this card will most likely be stuck again on the vicious cycle of getting into credit card debt and getting ripped off on the interest rate.  My best advice to those who are feeling the need to apply for this card is best summed up in this quote:

“‘Anyone who feels they have no choice but to get one of these should get help from a credit counselor,’ advises Sandy Shore, a counselor with Novadebt, a New Jersey-based consumer credit counseling agency. ‘There are other alternatives, like a debit card or even a secured card.’”

Can not add much more to that, except there is always another way out of a bad situation instead of using a rip off 80% credit card.  It might be easy to use the card now, but in the long run this will do serious damage to your financial health.  Hopefully enough people will learn their lesson and cards like these will cease to exist due to nobody using them.

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