$400 Credit Card Debuts from First Premier

Personal finance experts have long been warning consumers about investigating credit card fees before signing up for a card. Believe it or not, there are card holders actually willing to fork over $400 a year to have one of First Premier Bank’s cards.

This $400 annual fee card is not designed for the rich and famous. This card is actually promoted to consumers who hold poor credit scores but still want access to credit. In addition to the $400 annual fee, the card carries an astounding 36% interest rate as well as other high fees that go along with the card.

A First Premier Bank representative stated their card fees are based on the risk associated with the consumer applying for the card. In the case of people with poor financial histories, the risk of card payment defaults is significantly higher than with consumers holding excellent scores. The bank representative defends the high rates as a way to protect the company’s bottom line.

Critics say that the higher fees for cards are not doing a thing to help people struggling with bad credit. It can be a vicious cycle of debt and bad credit for consumers that seek out more cards in order to have access to money. Perhaps the high rates on some cards would actually serve as a detractor for bad credit consumers wanting a new card.

First Premier’s annual fee is not the only costly aspect of the card. The bank also imposes a Credit Limit Increase Fee which consumers must pay each time they get an increase in their card limit. To date, there is no other credit card provider that imposes such a fee which currently stands at 25% of the increase amount. Card holders can request a credit limit increase at any time after being an account holder for 13 months or longer. Increases are only granted to those consumers who have shown responsible card usage.

The bank said despite the rare fee, thousands of card holders still request increases each month and pay the associated fee. The bank said customers have 30 days to change their mind about the increase and get the fee amount refunded.

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