One of the most respected consumer advocacy magazines has found, what it calls, the worst credit card in the nation and the motto of the company that issues this card is “Treating People the Way We Want to be Treated.” If that is true, then this bank must feel much abused.
When President Obama signed the 2009 Credit Reform Act, he promised sweeping reforms to protect consumers from the abuses of roque credit card companies and banks that were charging outrageous interest rates and fees. The customers of First Premier Bank of Sioux Falls, South Dakota are probably wondering when those reforms will trickle down to them.
The non-profit Consumers Union, which publishes Consumer Reports magazine, says the First Premier Bank Mastercard is the worst. Despite the new laws, the bank is still marketing a credit card that carries a 59.9 interest rate! To get this card, customers must pay $120 in fees for the first year and you can only borrow up to $300!
What right-thinking consumer would do that! That's the point. Those who were calling for credit reform say this is just the kind of deal that unsophisticated and desperate consumers sign up for because they don't know any better and they need credit.
First Premier Bank isn't hiding from this deal. It told the Daily Beast website that it is providing a service for financially troubled customers whose credit is so bad they can't get credit cards from anyone else. There is no doubt that what the bank is doing is legal, but it should be a reminder that despite the new federal rules and laws consumers are not protected from this kind of financial “tough love.” The government is not protecting people from high interest rates, unusual fees and penalties or anything else related to those credit cards in your wallet. It is still up to you to read the fine print.