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Credit Card with a 79% interest rate!!!!


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Feb 8, 2011, 11:29am   #1
Ladybug09's Avatar
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So Sweet!
Wow, this is crazy.



Quote:
<H1>It's highway robbery: Credit card company charges customer '79% interest rate'
Quote:


By David Gardner
Last updated at 11:43 AM on 8th February 2011A credit card company has been accused of ‘highway robbery’ for allegedly charging a customer a staggering 79 per cent interest rate.
Toni Riss, 58, from Texas, told CNN she was stung by the sky-high rate at her most vulnerable time when she was struggling with bad credit.
She said she was overjoyed when her application for a First Premier card - which is aimed specifically at consumers with poor credit – was approved.

i.dailymail.co.uk/i/pix/2011/02/08/article-1354755-052F7E2D000005DC-7_468x286.jpg Debt trap? A Texan woman was charged 79.9% interest for her First Premier Bank credit card

But her delight turned to despair six months later when she claimed her starting interest rate of 29.9 per cent shot up to 79.9 per cent.
‘I had an accident on a motorcycle, went through bankruptcy to pay for medical expenses and my credit went to hell in a hand basket, so I was looking for credit cards for people with bad credit,’ Ms Riss explained
But she said: ‘I about had a heart attack when I got a disclosure notice saying that my starting rate of 29.9 per cent was going up to 79.9 per cent. It was ludicrous. Talk about a highway robbery.’

More...

At about the same time that Ms Riss claimed she got her unwelcome surprise in the mail, First Premier Bank launched a new credit card with a 79.9 per cent rate, said CNN.
But too many people ran up bad debts on the card without paying it back and the bank dropped the rate to 59.9 per cent, First Premier Bankcard CEO Miles Beacom told the network’s business desk.
Since then, nearly 700,000 people have signed up for the card and more than half carry a monthly balance, he added.
i.dailymail.co.uk/i/pix/2011/02/08/article-1354755-0D157EAB000005DC-550_233x423.jpg Capitalising on credit: First Premier Bank card CEO Miles Beacom has attracted thousands of customers with poor credit ratings

The high interest rate is said to be completely legal. The Card Act, which was passed in late 2009 by the Obama administration to protect the public from predatory lenders, only stops banks from raising rates retroactively.
As long as they are clear about the what they are charging up front, they can set the rate at whatever they want.
Mr Beacom insisted that Ms Riss would only have been landed with the 79.9 per cent rate if she took out a new card at that rate.
Despite the high rates and service charges, First Premier reportedly told CNN that there is a huge and growing market for cards for people with bad credit.
The bank said it has almost three million customers across the country and gets anywhere from 200,000 to 300,000 applications a month.
First Premier is said to be more cautious due to the Card Act – but still opens about 50,000 accounts a month.
‘The approach is much like high-risk auto insurance,’ Mr Beacom told CNN.
‘If you have a bad driving record, you have to pay more and once your driving record has improved, your premiums will come down. When the cardholder's credit score improves, they may start to qualify for more traditional types of credit card offers with better rates and less fees,’ he added.

Ms Riss said she was eventually able to rebuild her credit and qualified for a card with a much lower interest rate.
‘I eventually picked myself up and re-established myself, but I want to be a warning to people who would ever think this is a good deal,’ she said.



Read more: http://www.dailymail.co.uk/news/arti...#ixzz1DOCJmnLz
</H1>
Feb 8, 2011, 1:28pm   #2
~Fabulousity~'s Avatar
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Wth!
Feb 8, 2011, 1:33pm   #3
pmburk's Avatar
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I was just going to post and ask if it was the KardashiKard.
Feb 8, 2011, 4:57pm   #4
ArmCandyLuvr's Avatar
Member
^^^ I thought of that, too.

79% percent is usurious as far as I am concerned. These credit card companies that offer credit to those with prior credit issues are exploiting their desperate situation. They're just as bad those payday loan places that charge upwards of 600% interest.
Feb 8, 2011, 6:54pm   #5
Tuesdays Child's Avatar
Member
Originally Posted by ArmCandyLuvr
^^^ I thought of that, too.

79% percent is usurious as far as I am concerned. These credit card companies that offer credit to those with prior credit issues are exploiting their desperate situation. They're just as bad those payday loan places that charge upwards of 600% interest.
There are no federal laws with regard to usury, its all dependant upon the state wherein the cc company is incorporated. That's why they choose to incorporate in states like deleware which have no usury laws.

(Thanks to google I am a genius in so many topics...)

Basically these are legalized loan sharks.
Feb 8, 2011, 9:04pm   #6
JAN!'s Avatar
<3
Ouch
Jun 4, 2012, 4:34am   #7
Flip88's Avatar
Member
Incredible that people fall for this sort of thing.
Jun 4, 2012, 9:09am   #8
~Fabulousity~'s Avatar
Member
Originally Posted by Tuesdays Child
There are no federal laws with regard to usury, its all dependant upon the state wherein the cc company is incorporated. That's why they choose to incorporate in states like deleware which have no usury laws.

(Thanks to google I am a genius in so many topics...)

Basically these are legalized loan sharks.

Jun 4, 2012, 9:13am   #9
chantal1922's Avatar
30 pounds down!
Woah
Jun 4, 2012, 9:40am   #10
Louiebabeee's Avatar
Member
Well, I now feel way better about the interest on my cc....LOL
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