Wednesday, October 21, 2009
Gordon Hageman couldn’t believe the credit card offer he got in the mail. A wine distributor called the number on the offer, gave them the offer code and verified his information and it was right: the pre-approved credit card came with a 79.9 percent APR.
The offer is for a Premier credit card from First Premier Bank. Based in South Dakota, First Premier claims to be the country’s 10th largest issuer of Visa and MasterCard credit cards. The site says it “focuses on individuals who have less than perfect credit but are actually still creditworthy.”
Hageman acknowleged that his credit isn’t perfect, but he said it’s about average. He said the pre-approved offer didn’t mention the actual interest rate on the card — for that, he had to read the enclosed fine-print disclosure.
“I think they’re trying to take advantage of me,” said Hageman.
A spokesman with the Federal Deposit Insurance Corporation (FDIC) said interest rate limits on bank cards are set by the individual state and not on a Federal level. According to information on the South Dakota Legislative Web site, there is “no maximum or usury restriction.” In other words, the individual bank can set its own interest rate limits.
Let this outrageous bank offer stand as a cautionary tale for consumers.