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Issuer of 79.9% Card defends ....

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This is probably old news to you guys, but I missed it so thought I'd post. I'm shocked, although not surprised. Who would WANT this card?

Issuer of 79.9% Interest Rate Credit Card Defends Its Product

by Connie Prater

Friday, February 12, 2010

Link: http://finance.yahoo.com/banking-budgeting/article/108839/issuer-of-79.9-interest-rate-credit-card-defends-its-product?mod=bb-creditcards

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If the dopes sign up for it, and you have a borrower and lender that agree on the terms, then who is the nanny government to intervene? I'm surprised that someone like you who has a healthy dose of skepticism of government policy would see a problem with this.

These cards are for people with putrid credit. Maybe the default rate on these cards are >20%. When you add in the low limits (low collection of merchant fees) and administrative burden of billing, maybe 79% apr isn't enough. I don't know, and I'm not sure its my business to find out nor anyone elses.


'Has First Premier gotten any takers on the 79.9 percent cards? Beacom called the response "phenomenal," adding 2 percent of people receiving the offers have applied for the cards. Their normal response rates is 1 percent to 1.2 percent, he says. "It's double what our normal product was."'

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When I first started rebuilding my credit and needed some quick FICO points I signed up for one of their 59% cards. Its purpose was solely to get a revolving line onto my credit reports. It served a purpose. I've since received an offer from them for a 19% card with a $1K limit - when I called them to get it they said they only allowed 1 account at a time and that I would have to close the old account, then wait 90 days and re-apply. My response was something like I don't need your card that bad. I figure I'll kill off the card next year when the monthly fees kick in...yes, they actually have the nerve to charge a monthly service fee to keep the card after 12 months. Until then I'll let it keep reporting and increasing my scores.

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  • 8 months later...

If your sole purpose is to restablish credit and you pay your bill in full each month then the interest rate doesn't really matter.

I got one of these cards when it was the only unsecured credit card I could get. I've paid it in full every month and avoided any fees. My credit score has gone from 590 to 733 and I am now eligible for better cards. This card helped me get there. I'm glad it was available.

Just don't misuse it or they will hammer you hard.

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  • 2 months later...
  • 2 weeks later...

I need to rebuild my credit as well. My husband and I are trying to buy a house and with a few negative items on our CRs it's dramatically dropped our scores. We were approved for a $250k loan based on our income, but our scores are what's holding us back. I think this is something to look into...though not at 79%.

We have a local jewelry place that offers their own CC and when I initially opened a line of credit, no set limit, my score jumped up about 25 points just for opening it. It shows "paid as agreed" for about 8 months and then they closed it because I didn't use it. I might have to look into that again.

Thanks for the suggestion above! ;)

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