Posted on 02/14/2010 9:08:16 PM PST by ErnstStavroBlofeld
If you have bad credit in the new era of credit card regulation, be prepared to pay -- dearly -- for the privilege of using credit. That's the message underlying recent credit card offers that feature jaw-dropping interest rates of up to 79.9 percent.
The sky-high rates may be a sign of things to come in the market for so-called subprime credit cards as issuers who lend to the riskiest of borrowers try to figure out how to stay in business and comply with the new credit card reform law.
"We need to price our product based on the risk associated with this market and allow the customer to make the decision whether they want the product or not," according to a statement issued by Miles Beacom, CEO of Premier Bankcard, the South Dakota credit card marketer that mailed test offers in September and October featuring 79.9 percent and 59.9 percent annual percentage rates (APRs) on cards with $300 credit limits. Premier markets credit cards issued by First Premier Bank.
Yes, It's Legal
A national bank charging 79.9 percent interest on a credit card is legal -- as long as the issuer fully discloses the terms as required by the federal Truth in Lending Act. Still, the high rate has been met with shock across the country because it is so much higher than prevailing APRs and penatly interest rates. The CreditCards.com Weekly Rate report national average for bad credit credit cards was 14.15 percent on Feb. 12
(Excerpt) Read more at finance.yahoo.com ...
Is today April 1st, April Fools Day, or is this company just stupid?
Its the real deal!
They are making the pay with cash crowd look very good at this point in time. Who in their right mind would sign up for this?
You load sixteen tons what do you get
Another day older and deeper in debt
Saint Peter don’t you call me ‘cause I can’t go
I owe my soul to the company store
The people who usually sign up this are people who have bad credit or no credit.
I know loan sharks with lower rates.
You are correct
So, if a Mafia loanshark informs you at the time of the loan how exorbitant the vig will be, does that then make the loan legal?
they don't sign up for it - they have the cards already then one day, they get a notice about the raise
they are doing it on good customers too - not as bad, but like never before....because they CAN get away with it - rather like the gov't. Need/want more money? Raise the taxes/interest rates.
More people are turning to debit cards/cash. And that's a good thing.
But 79+%??? I thought there were usury laws? When did those disappear?
Each U.S. state has its own statute which dictates how much interest can be charged before it is considered usurious or unlawful
With the small limits, you could get this card, pay off monthly, and use it until you get something better.
While the interest rate is insane, it can be useful.
Exactly. But some people are simply addicted to credit
To me, this is how I read it:
You REALLY want a credit card? You really want to learn how to properly manage credit? You do realize that there is a penalty for carrying a balance, right?
Ok then sign up for this card. We will charge you 79.9% interest, based on outstanding balance at statement closing date. Pay your balance in full each month and you have no finance charge due.
Of course, I realize that this “bank” is not in the business of trying to help consumers learn such lessons, but I see this as a way of teaching them, or burrying them.
Pay the balance in full each month, or at minimum - do not carry any more balance than you are willing to pay 79+% interest on!
I've got a friend who got his credit card through the Enlisted club at Eglin AFB. A couple weeks ago he showed me his monthly statement. The interest rate they were charging this guy...now remember, this is a retired vet who got his credit card though the club...about 35% APR.
It's one thing for a company to charge a high interest rate after giving fair warning to customers that unpaid balances will be painful. It's entirely different for the Enlisted ranks clubs to sponsor credit card accounts through their operations and soak retired vets at over 35%.
Have any of you had the same experience?
don’t keep a balance and you won’t have any problems.
“Exactly. But some people are simply addicted to credit”
and then they want the govt to protect them from those ‘evil’ lenders.
That is absolutely true.
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