We all know there are plenty of bad credit card deals out there for those with bad credit. However the Aventium Classic credit card stoops to an all-time low…
Okay… so your credit sucks and you want to rebuild it. You search far and wide on some credit card websites and see them pushing the First Premier Bank Aventium MasterCard as their top choice for bad credit.
Is this credit card really the numero uno? Or is the reason for it being number one because it’s a huge money maker for the website advertising it? Review the card and decide for yourself.
How it works…
For 2012 here’s a look at the fees and rates…
- When you apply for Aventium’s credit card you have to pony up a $95.00 security deposit. In exchange for that, you only get a $300 credit limit.
- You first year’s annual fee is $75.00. Yes, that’s the equivalent of 25% of your entire credit limit!
- For the second year and beyond, your annual fee drops down to $45.00. However starting on the second year, they also add a $6.50 “monthly servicing fee” to your account. Multiply that by twelve and add in the $45.00 annual fee… it’s costing you $123 annually for the 2nd year and beyond.
- If you ever end up carrying a balance, watch out! The Aventium credit card’s interest rate is an outrageous 49.9%. That’s about 20% higher than what even the worst store credit cards will charge you!
*Sidenote: You would think the “servicing fee” would help fund good customer service, right? Well according to a number of Aventium credit card reviews I have read online, their customer service is downright awful.
Aventium vs. competitors?
Simply put, the Aventium credit card is a horrendous deal no matter how you slice it.
Even if you have bad credit, you can apply for secured credit cards that have less fees (as low as a $29 annual fee) and the security deposit amount can be as little as $200. Remember security deposits – whether on the Aventium or another card – will be fully refundable when you close out your account.
So let’s see… paying something like $29 or $35 per year for a secured card from another issuer? Or paying $75 to $123 per year for the Aventium Classic MasterCard? Take your pick.
Why is Aventium being so ridiculous?
That brings us to the question… why is Aventium being so greedy with their credit cards? And how are they getting away with this?
When the Credit CARD Act (the reform) was passed, it capped the amount of fees a card issuer can charge during the first year; no more than 25% of the card’s credit limit.
Before the reform, First Premier Bank actually had cards with fee which were more than 25% if you can believe it. But to be in compliance with the law, they set the Aventium card’s annual fee at $300 for the first year, which is exactly 25% of the credit limit.
However as discussed above, on year two they start charging a $6.50 “monthly servicing fee” which places the total fees per year at $123… that’s 41% of the credit limit! But that’s 100% legal because the Credit Card ACT only regulates the fees during the first year and not after. I presume that’s why the Aventium fees are structured this way.
As to why they’re being so greedy… that I cannot answer. Obviously not everyone is going to fall for this trick. However there is plenty of demand out there for bad credit credit cards, so as long as there are people gullible enough and/or who don’t read the application before applying, my guess is this card will stay on the market.
Conclusion? The Aventium Classic is nothing but a classic horror story.