Smart SpendingSmart Spending

Customer interest in 79.9% credit card is 'phenomenal'

The company offering the sky-high-interest-rate card to consumers with poor credit says the response has been great.

By Karen Datko Dec 29, 2009 5:36PM

Readers’ responses to our post about a credit card with a 79.9% interest rate included more than a smidge of outrage. “It is almost time for Americans to pay off all credit card debt and then only pay cash. These people have given new meaning to the word GREED,” “pghkid” wrote.

But how is the new subprime card offer mailed by Premier Bankcard going over with prospective customers? Premier hasn’t said how many applications were distributed, but reports:

(Miles Beacom, CEO of Premier Bankcard) called the response "phenomenal," adding 2% of people receiving the offers have applied for the cards. Their normal response rate is 1% to 1.2%, he says. "It's double what our normal product was."

While that may seem nuts, it’s actually understandable.


Many people have difficulty getting regular credit cards. An estimated 50 million to 60 million people have no or very little credit.

The 79.9% interest card is actually an improvement over  another Premier subprime card -- the Centennial Gold MasterCard -- which comes with a 9.9% interest rate, about $250 in fees and a $300 or so credit limit. MSN Money columnist Liz Pulliam Weston named the Centennial Gold MasterCard “the worst subprime card.” 


However, new credit card rules that take effect in February limit the upfront fees on subprime cards to 25% of the credit limit and will make the Centennial Gold fee structure obsolete. With a fee of only 75 bucks and a $300 credit limit, the 79.9% card could be a huge savings -- if you don’t carry a balance from month to month.


Premier Bankcard says the high interest rate is necessary because of the risk of extending credit to those who haven’t successfully managed their money in the past. But, before you mail in that application, consider there are other ways to build a credit score.

  • Apply for a secured credit card. The credit limit is the amount you deposit upfront. But watch out for fees, and make sure the card issuer reports to the three major credit bureaus.
  • Consider another subprime card with a lower interest rate.
  • Get a store or gas card and use it responsibly.
  • Pay all of your bills on time.

If you got an offer in the mail for a card with a 79.9% interest rate, would you apply? Would you be responsible and pay off the entire balance each month?


Related reading:

Nov 1, 2010 4:00PM
Try refinancing, the reason there are still foreclosers is the banks will not help, they don't want you, they want us the taxpayers to help with the bailout money but not to do the same for the consumer.  But look at Wells Fargo, man they made huge profit last quarter, but where is there help.  I did believe in the bailout money but it did not help the little people at the end of the pole, just the big investors!
Nov 1, 2010 3:57PM
i just cancelled my JC Penney's card at 26.9% they can put that you know where, I have had the card for since I was 18 years old, and now at 50 you don't want to be fair? screw that idea, I just won't shop there and maybe they can go out of business or find someone else!  what a screwed up country we have. 
Nov 1, 2010 10:16AM
I agree with the spirit behind the great bank bailout.  The banks were supposed to use the money to fix the problems that they had a major hand in solving.  But as soon as they got the bailout, they started using the money to give themselves astronomical bonuses.  I love president Obama, but I admit that he was way too trusting.  The bailouts should not have been given until iron-clad restrictions on their use were laid out, thus preventing loopholes that allowed them to first dip their filthy hands into that money to serve their greedy bellies.  And lets talk about those huge tax cuts to the rich that were supposed to stimulate the economy.  The research is back, and the findings were that instead of pouring the money back into the economy, the rich held onto the money and stashed it.  So the Bush tax cuts are only helping the rich, and no one else. We need firm laws written into our constitution to prevent such outrageous economic exploitation.  We cannot count on these big businesses to do the right thing.  That is what extreme right wingers argue: Let the businesses run themselves without government interference. It's not working. These people are so blinded by their obscene profits that they will not do anything to protect consumers willingly - they must be forced to.
Nov 1, 2010 10:07AM
I'm a middle class person who grew up in the inner city with a lot of poor people. One of the things I noticed was the fact that poor people always found a way to buy the most expensive clothes, technology, and jewelry. I now teach in schools that have a high number of low income individuals and I see the same thing.  So on the one hand, people need to take responsibility for their financial choices. But I will not let these greedy banks off the hook.  Why is it that as soon as a law is passed to protect consumers from the greedy practices of the financial system, the banks immediately seek a loophole?  People who always look for loopholes have a criminal mentality. You don't belive me?  I was a correctional psychologist for several years.  I found that criminals are always looking for loopholes that will let them get away with their evil deeds.  The banks and big businesses are absolutely no different. Always looking for loopholes to allow them to reap disgusting profits at the expense of lower income people who do not have the power to defend themselves.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.