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For real: A 79.9% interest credit card

An industry analyst says it's the highest rate he's ever seen.

By Karen Datko Dec 18, 2009 4:33PM

Here’s a credit card offer that should create some instant converts to Suze Orman’s new cash-only mantra: Subprime lender First Premier Bank is offering a credit card with a 79.9% interest rate.

A credit card analyst said it’s the highest rate he’s ever seen.


We suspect you’d likely get a better rate from Hesh, Tony Soprano’s old loan shark friend.


“The bloated APR is how First Premier Bank, a subprime credit card issuer, is skirting new regulations intended to curb abusive practices in the industry,” Candice Choi wrote at The Huffington Post. And you can expect similar tactics from other outfits that specialize in providing cards to people with poor credit scores.


Isn’t it funny (not the ha-ha kind) how reforms intended to protect consumers from credit card company abuses have instead led to higher interest rates and minimum payments and other changes to terms that are creating hardships for even the best customers?


That’s what happened here. The First Premier Bank subprime credit card -- still available online -- used to come with $256 in fees in the first year for a card with a $250 limit, Choi reported. New credit card rules in February will limit those fees to 25% of the card’s credit line. So First Premier lowered its fees in its new preapproved snail-mail offers to comply with the new law -- but upped the interest rate on the card from 9.9% to that eye-popping 79.9%.


Congress in its wisdom did not set a limit on credit card interest rates.


Choi said the new rate amounts to about $20 monthly on a $300 balance. First Premier, based in Sioux Falls, S.D., said the new rate is just a test and won't say how many people received the offer.

Meanwhile, other credit card companies continue to alter their terms to rake in more profits before the new rules and regulations take effect in two months. According to James Limbach of, more card companies are, among other things:

  • Tying the interest on cards with a variable rate to the highest prime rate within a 90-day period, rather than the prime on the final day of the last billing period.
  • Increasing late fees, and lowering the balance that qualifies for the highest late fee if the issuer has a sliding scale.

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