79.9 Percent Credit Card Interest Rate Is Out

It may sound like a joke but it isn’t. A 79.9 percent interest rate credit card is now available for consumers crazy or desperate enough to get one.

The 79.9 percent APR (Annual Percentage Rate) credit card comes courtesy of First Premier Bank, a credit card company focused on subprime borrowers. The overly high APR rate is First Premier Bank’s strategy to find a way around the upcoming new credit card regulations which will prevent abusive credit card company practices which brought many a card holder to the brink of financial destruction when the economic crisis hit. The strategy, should it become successful, may soon become a common one among the subprime credit card companies in the country.

A typical First Premier Bank credit card is quite expensive. For a card with an available credit line of $250, card holders have to fork over a minimum of $256 in the form of fees for the first year. However, once the new credit card legislation comes into play which is on February of next year, the First Premier Bank will no longer be able to charge such high fees. The new law will cap such fees to 25 percent of the credit card’s credit line. In fact, in recent preapproved card mailings, First Premier Bank has already lowered its fees right at the limit, equivalent to $75 of fees for the first year for a card with a $300 credit line.

However, the new credit regulation only puts a cap on fees, not on interest rates which is why the 79.9 percent rate of First Premier Bank is quite valid and legal. Notably, the previous rate for First Premier Bank’s cards was at 9.9 percent.

Anuj Sahani who is an analyst at credit card mail tracking firm, Synovate says First Premier Bank’s APR is the highest on the market today. “It’s the highest we’ve ever seen”, he says.

Although the terms of First Premier Bank’s credit cards is astonishingly high, the bank does target consumers who have bad credit scores. This particular group is not likely to be able to find credit cards from regular credit card issuers. Thus, it is quite plausible that these 79.9 percent APR cards will likely find a considerable amount of applicants. Moreover, consumers who belong in the bad credit score group are also more likely to incur financing charges which means that First Premier Bank’s 79.9 percent interest rate gamble may payoff impressively.