Business, Miscellaneous NEWS


Man offered Credit Card with 79.9% interest rate

Published by Waleed Fakhroo on October 16, 2009

No, You’re Reading That Right
79.9 percent rate targets credit-challenged

Gordon Hageman couldn’t believe the credit card offer he got in the mail.

“My first thought, it was a mistake,” Hageman said.

The wine distributor called the number on the offer, gave them the offer code and verified his information. Sure enough, it was right: the pre-approved credit card came with a 79.9 percent APR.

Yes, 79.9 percent.

The offer is for a Premier card from First Premier Bank, which is based in South Dakota. On its Web site, First Premier says it is the country’s 10th largest issuer of Visa and MasterCard credit cards. The site also says it “focuses on individuals who have less than perfect credit but are actually still creditworthy.”

“I think they’re trying to take advantage of me,” said Hageman.

Ya think?

Hageman acknowleged that his credit isn’t perfect, but he said it’s about average. He said the pre-approved offer didn’t mention the actual interest rate on the card — for that, he had to read the enclosed fine-print disclosure.

“I think you’re beginning to border on deception there,” San Diego State marketing professor Michael Belch said.

Belch said the card is offering a bad deal to people who are desperate.

“They’re just finding different ways to gouge the consumer,” Belch said.

The California Attorney General’s office said there’s nothing it can do about the cards since they are issued out of state and out of its jurisdiction.

A spokesman with the Federal Deposit Insurance Corporation (FDIC) said interest rate limits on bank cards are set by the individual state and not on a federal level. According to information on the South Dakota Legislative Web site, there is “no maximum or usury restriction.” In other words, the individual bank can set its own interest rate limits.

Several calls made to First Premier for a comment were not returned. ( source : )

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  1. Javarod on Wed, 21st Oct 2009 4:04 am 

    Now you know why all the credit card offers you get are from South Dakota or Delaware.

  2. Lee on Sat, 24th Oct 2009 5:24 pm 

    This is true, I’ve had this happen to me before after my divorce and I was trying to rebuild my credit. Then they put you in the Credit Bureau for not paying late fee’s even though you have not bought a single thing. They charge you monthly for a card you don’t even use. It added up to me owing them 762.00 and I bought 10.00 worth of gas and when the bill came in the 10.00 cost me 43.00 and some change. I tried to canceled the card and they said no. I paid the 10.00 and never sent them a dime, I’m now in the CB for them. Never try to fix your credit by getting these scammed cards, it’s truly not worth it.

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