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.

February 11, 2010

Customer’s disagreement with Bank of America

Filed under: Personal Finance, Real Example — Tags: , , , — thebalancedspreadsheet @ 1:22 pm

Ever been mistreated by a credit card company? You are not alone. A poster at Cash Commons recently posted their story of being totally mistreated from Bank of America’s credit card division. You can read the full post on the site 2DogCasa. Reading her story makes me really glad I do not have any credit cards. Treating a good paying customer like they did is really ridiculous. My advice was to close the account and get rid of BOA forever. It is simply not worth putting up with the garbage.

On a side note USA Today had a wonderful cover story in their Money section on Monday on the decline of credit card use in America. With stories like the one above it is a wonder why it has not happened sooner.

Has anybody else have horror stories dealing with credit card companies?

December 18, 2009

79.9% Credit Card? Who would use that?

Filed under: News Review, Personal Finance — Tags: , , , , , — thebalancedspreadsheet @ 2:56 pm

I came across this article from the AP this morning while browsing the web titled Credit card’s newest trick: 79.9 percent interest.  It is about First Premier Bank and how it is marketing the expensive credit card at 79.9% APR.  It is marketed toward subprime customers who can not get a traditional credit card.

There are some interesting quotes and figures in the article.  The cards credit limit is only $250-$300 but the annual fees are currently $256 in the first year!  Although starting in Feb 2010 the fees will drop to $75 in compliance with the new credit card regulations.  With all that being said this quote really got me:

“Even when the cost of credit is astronomical, for people in true emergencies, it’s much better than not having access to credit,” said Odysseas Papadimitriou, CEO of

If you have read this blog for any length of time, you know that I am pretty much anti-credit card.  With that being said, I can not believe that quote.  They would be better off to continually get ripped off with high fees and interest rates then to not have access to credit?  Well how much of a blessing has their credit been so far?  It has lead to defaults and higher interest rates!  Unbelievable!  People who have shown the inability to handle credit should not be extended more!  To me this is just another example of the poor being taken advantage of, similar to pay day loans.  Now granted the people who sign up for this card did have a choice before filling out the application and they should be held responsible for their debt, but to me you have to have some kind of moral responsibility as a business to not market this stuff.  Sadly the reason they do market this junk is because people use it and it is profitable.  I think we just need to educate more on how bad of a product this is and how it is not beneficial to consumers in the long run.

Well there’s my soap box.  Anybody else have any thoughts on this?

November 30, 2009

FICO reveals how certain financial events affect your score

Filed under: News Review, Personal Finance, Uncategorized — Tags: , , , , — thebalancedspreadsheet @ 6:09 pm

After years of mystery surrounding how certain financial events affect your credit score, FICO is revealing how some mistakes change your score according to an article by Jeremy M Simon of  The article titled “FICO reveals how commons credit mistakes affect score” is an interesting read.  I am not a huge fan of the FICO and do not believe it is the end all and be all in determining your credit worthiness but I do feel it is important to pay your bills all the time and have clean credit.

It is interesting to see how the different financial events lower your scored.  Obviously Bankruptcy and Foreclosures are an atomic bomb to your score.  But it is also interesting to see how debt Settlement lowers your score.  It is actually pretty close to a foreclosure in terms of lowering your score.  It will be interesting to see what happens in a few years when all the people who are short selling their homes recover enough to buy another house.  Will they take longer to qualify again for a mortgage or will the banks have easier standards considering this will affect many applicants?

October 30, 2009

Penalty for staying out of debt?

Filed under: News Review, Personal Finance — Tags: , , , , — thebalancedspreadsheet @ 11:35 am

I meant to post this article I found in USA Today by Sandra Block last week, but did not find the time.  But I still wanted to post it because it seems like every time you look up your bank is tacking on another fee.  Below is a good excerpt from the article:

You floss regularly, yield to oncoming traffic and use your credit cards judiciously, dutifully paying off your balance every month.

You may believe that your exemplary behavior shields you from unexpected credit card fees. Sadly, that is no longer the case.

Starting next year, Bank of America will charge a small number of customers an annual fee, ranging from $29 to $99. The bank has characterized the fee as experimental. But card holders who have never carried a balance or paid late fees could be among those affected.

Citigroup, meanwhile, has started charging annual fees to card holders who don’t put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don’t use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt.

For me, this just enforces why I do not have a credit card and especially reinforces why I do not deal with the mega banks.  Bank of America is now going to charge you $29-$99 just to have the right to borrow money!?!?!?  For not using your card an average of $200 a month you will get a charge from Citi?  Imagining having to pay a fee for something that might not get used is just plain crazy.

That begs the question, how long will these banks be able to get away with his customer abuse before their loyal customers revolt and take their business elsewhere?  To me it is only a matter of time.

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