First Premier Bank Credit Card Review
Executive Summary - First Premier is one of two unsecured cards today that specifically target the sub-prime market. The other card being Credit One. Compared to the Credit One Visa, FP has ridiculously high fees and APR. If you are seriously considering this card, we would urge you to check out the Credit One Visa With Gas Rewards instead.
One of the first cards that a person with bad credit will hear of or be offered is the First Premier Bank Credit Card. The bad news of course, is that credit cards in general can be confusing to people with no credit or bad credit, but the world of subprime cards for consumers in these situations can be even more mysterious.
Who is First Premier Bank? - First Premier Bank was established in 1929 and is the 9th largest issuer of MasterCard credit cards. Unlike other subprime cards, First Premier Bank is a legitimate bank that has been around a while. They are located in Sioux Falls, South Dakota and are members of both the Better Business Bureau and the FDIC.
First Premier also provides services for cardholders such as Credit Management which allows cardholders to check their Experian credit reports and scores for $3.99 a month while essentially providing a form of credit monitoring at the same time. It appears though, that the service is exclusively with Experian, so you would still need to check your reports with TransUnion and Equifax as they will probably be different.
Another service First Premier offers is Credit Protection which protects your account against unexpected events such as disability, involuntary job loss, hospitalization and loss of life.
How Does the Card Work? - When you apply for the First Premier Bank Card, your credit limit is $300. As with most cards for those with bad credit, there are fees involved. First, there is a security deposit of $95.00 which is refundable. If you close your card account, you will receive your security deposit minus any balance that is on the card. You can pay on the security deposit as you like, but your account won't be opened until the full amount has been paid.
You will also pay an annual fee which is $75.00 the first year and then $45.00 annually thereafter. There is also a monthly servicing fee which is billed at $6.50 per month for a total of $78.00 annually. The monthly servicing fee does not begin until after the first year of card ownership, which means that you won't pay this particular fee the first month.
The APR on the First Premier Bank credit card is 36% on purchases and cash advances (in fact, it was as high as 79.9% for some customers who signed up my mailings!). You can avoid paying interest on purchases if you pay your entire balance in full by the due date each month. (Note: the screenshot was taken from an old terms and conditions page before they raised it to 59.9% and 79.9%!)
Credit Line Increase Fee - This is another one of those fee suckers. If your credit limit is increased by First Premier, they will charge you a fee that is equal to 50% of the credit line increase. As an example, if your credit line is increase by $100, you will be charged a fee of $50! Only in the subprime world does this exist!
Comparison With Other SubPrime Credit Card - Since the CARD Act, many changes have happened in the sub prime credit card world. First Premier had to make their own changes. These changes were due to a provision in the CARD Act that any upfront fees charged could not exceed 25% of the initial credit limit given. First Premier did comply with this, but jacked up their rates to 49.9%, 59.9% and even 79.9% to offset decline in fees. Most of their counterparts like CompuCredit (which issued the Imagine and Tribute credit cards) simply stopped issuing these cards. So at this moment, there aren't many cards to compare with (although with the exorbitant fees - you could argue that there is no need for comparison).
Today, it has only one true competitor, and that is Credit One Bank.
First Premier vs Credit One - In comparing this card with another popular subprime card, the Orchard Bank card from HSBC offers a couple differences.
Firstly, Credit One does not charge any one time processing fee or monthly maintenance fees. The annual fee will range from $35 to $75. The APR ranges from 17.9% to 23.9%. While it isn't exactly low, it is not 36% either.
The Credit One card also reports your history to all three credit bureaus and assists in rebuilding and building credit if you make your payments on time. Although both the First Premier and Credit One Bank cards help cardholders in this manner, the fees are lower with the Orchard Bank card.
Should You Get This Card - HECK NO! Why get a card that charges 36% interest rate. If this is not daylight robbery, I do not know what is. I would recommend that get the Credit One instead as it has lower fees and APR (and they do not charge credit line increase fees!). You also get to earn reward points for gasoline spending.
If your credit score is in the 600s, then you should consider the Barclaycard Rewards MasterCard® - For Average Credit as well.