Posted: February 10th, 2011 | Author: Joe | Filed under: Credit | Tags: bad credit, Credit, Credit Cards, Credit score, Debt, First Premier, subprime credit card | 1 Comment »
I blogged about First Premier Bank Credit Card offer exploiting a credit card loophole in the 2009 CARD act a while ago. I just couldn’t believe that a bank would not only charge customers 79.9% interest but they actually advertised the card to new customers! To be fair, it was targeting people with lousy credit histories, but it turns out that it may have been a bad business move for the bank.
First Premier Bank credit card offer with 79.9% APR is a hit.
According to this article, the initial offering of 79.9% proved popular with customers! What’s this you say? People actually wanted a card with such insane rates? Yes.
It turns out that so many people with poor credit saw it as an opportunity to rack up hundreds to thousands in free charges – and defaulted!
Muhahhaha…
Serves First Premier right!
Miles Beacom, the CEO said:
“A lot of the people ran up the card, defaulted and went directly to charge off.”
As a result, they dropped the rate to 59.9%. “We also tested it at 23%, 33%, 45%, but 59.9% is the one that shows the best performance and where the organization can market the product,”
I’m actually surprised the bank is still offering the card, since the CARD Act capped fees at a max of 25%, and the bank has said they were previously relying on even higher rates to offset the default risk of the customers.
Despite the $135 in annual fees and sky-high interest rates, the company claims to service about 3 million people, with 200,000-300,000 applications each month!
Strange days indeed.
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Posted: November 15th, 2010 | Author: Joe | Filed under: Credit, Tips | Tags: Credit, credit card identity theft, Credit Cards, Credit score, Tips | No Comments »
According to the Federal Trade Commission (FTC), identity theft ranked as the number 1 consumer complaint, accounting for 21% of all complaints it handled affecting over 1.3 million people. It’s no wonder that in the information age, stealing people’s identity (which is nothing more than personally identifiable information) would be so rampant. What may be surprising is just how easily it happens. Here are 4 all to common (and low-tech) ways thieves can steal your identity.
1. They take a picture of you scanning your card and entering your pin while you’re checking out. They’ll need to be near you, or just behind you and they’ll likely be posing as though they’re looking at their phone.
2. They tour around your neighborhood after you leave for work in the morning, or before you get home. They’re looking for bills you might be sending with personal information, or credit card offers and bills being sent to you.
3. They drive through the neighborhood in the wee hours of the morning (night), looking for garbage bags. They take the garbage, and sort through it later.
4. They attach a device called a “skimmer” to ATM’s. Skimmers sit between you and the ATM, so it looks like you’re putting your card in the ATM, but in reality you’re giving it to the skimmer – and the thief.
Why I don't own a shredder. 
As you can see, identity thieves don’t need to hack your computer to put you in a bad spot. Your mailbox alone can be a
gold mine. Think of how much damage they can do with convenience checks that your credit card company is nice enough to send out. To limit this as much as possible, be sure to
call 888-5-OPTOUT and call your credit card company and ask that they stop sending convenience checks.
It’s also for this reason that you should use an office shredder, and shred anything and everything that has your name, account number or even address on it, lest it end up in the hands of the wrong people.
Debit cards are another big risk. I know a lot a people advocate debit cards over credit cards because they help limit spending, but if a thief gets hold of your debit card number and pin, then he has access to your whole bank account. At least with a credit card it’s the issuer who’s out the money while you sort things out and you still have the money in your bank to pay the bills. This is why credit cards are more secure than debit.
If your bank or credit card company offers it, consider getting a card with your picture on it.
Also, try to use secure ATM’s – the kind with doors that only open with a valid bank card, or an ATM in a public place in plain site, like the kind in stores. It’s a lot more difficult to attach a skimmer in high-traffic, public areas. Using the same ATM helps as well, since you’re more apt to noticed something different.
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Posted: October 15th, 2010 | Author: Joe | Filed under: Credit | Tags: Credit, Credit Cards, Credit score | No Comments »
Last year’s defending champ for worst credit card has done it again! Congrats to First Premier Bank Mastercard for winning the title of worst credit card for 2010 for the second year in a row. Coming in a close 2nd is Applied Bank’s Platinum Zero Secured Visa. Here’s why..
First Premier Bank Mastercard
First Premier Bank Mastercard still the worst credit card out there. Besides settling out of court with the New York Attorney General’s office (always a bad sign), First Premier sports APR of up to 59.9% and a $75 annual fee. And because of the CARD Act of 2009, you could end up paying as much as $170 in fees even though the card only has a $300 credit limit!
But the biggest red flag is how these advertise (bolded by me, for emphasis):
“First Premier’s card now advertises a $25 to $95 processing charge (which fluctuates by the minute, depending on when you click on the card’s website).”
Beware – they also offer this card under the names: Centennial and Aventium.
Platinum Zero Secured Visa from Applied Bank.
This card has the dubious distinction of being the second worst credit card available. This is a sly piece of abusive marketing. They advertise 0% APR, no application fee and no annual fee but when you look deeper you see that none of it is really true. Oh, it’s technically true, just not really true. It all depends on what your definition of the word is is…
While there is no Annual fee, there is a $9.95 monthly fee (which adds up to $119.40 per year!). If you’re late with a payment, you’ll get hit with a $35 late fee. And that 0% APR is on purchases and cash advance, but there is no grace period and interest charges accrue beginning on the date of the transaction. So, again it is 0% technically - IF you pay it off on the same day!
It’s easy for someone like me to look at these cards and think that anybody who agrees to these terms deserves what he gets, but I know there are a lot of people with poor credit scores or no credit history and little opportunity to build or rebuild their credit score. But there is a better option than cards like these. These cards represent the worst of the credit card industry. They are the stereotypical credit card company that sucks the lifeblood from the very people who need a break – the so called subprime borrower. A better option for people who need to build their credit history might be secured credit cards.
source
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Posted: August 24th, 2010 | Author: Joe | Filed under: Credit | Tags: Credit Card Accountability Responsibility and Disclosure Act, Credit Cards, Credit score | 1 Comment »
Looks like the Credit CARD Act of 2009 isn’t quite putting an end to all those sneaky and unfair credit card tricks. According to a recent Wall Street Journal article, credit card companies are still up to their old tricks, albeit in a different guise.
- Shortened payment periods. The CARD Act of 2009 mandates that credit card companies must allow at least 21 days between the time the bill is mailed and the payment due date, but apparently some companies aren’t adhering to that.
- Sunday due dates. The CARD Act attempts to force credit card companies not to process payments on Sundays, since there is no US Postal delivery, but some banks are saying they are open . for business regardless, and if due dates fall on a Sunday, they fall on a Sunday.
- Low-limit cards. Since the CARD Act prohibits issuers from charging the outsized fees for charging over the limit on low-limit cards, some issuers are creating new processing and overdraft fees.
- Fake inactivity fees. It’s being called an annual fee that is waived when the cardholder spends a certain minimum amount, but that sounds an awful lot like an inactivity fee.
- Rebate offers. Some card companies are offering to refund finance charges when users pay on time, but such offers can quickly – and unexpectedly – be revoked, only to leave the cardholder holding a much larger charge than he anticipated.
Avoiding these traps and pitfalls is simple, but not easy. It’s for reasons like these that you should avoid carrying a balance at all costs. If you can’t do that, then it may not be a bad idea to cut up the card altogether. Just don’t cancel the account.
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