Seriously, who would want a card with an interest rate set at 79.9%?
The Associated Press describes the brains behind the operation, First Premier Bank, as a “subprime credit card issuer.” The fee for the first year of owning the card is $75 for just a $300 line of credit — the fee had previously been $256, but the new credit card legislation limits fees to 25% of the available credit line. So to get around that, the bank realized there’s no cap on interest rates — and the usual 9.9% interest rate is ballooning to 79.9% APR. On a $300 balance, that’s $20 monthly interest.
You’d have to be pretty desperate for credit to apply for such a card. First Premier Bank has begun sending out preapproval letters. I’m wondering how many people will take the bank up on the offer.