First Premier Credit Card Application Is Confusing

A lot of money could be made advertising First Premier Bank cards on this website, but we have chosen to forego that option. This is the reason why…

Regardless of how bad any choice you might make, ultimately it’s your right to make that decision, right?

That’s why the biggest issue with First Premier is not so much due to the product pricing. Rather, the bigger issue is the fact that their credit card application can be confusing to consumers.

I believe far fewer people would apply for a First Premier credit card if they clearly understood the terms and conditions of this card and were able to make an informed decision before committing themselves.

When I clicked on an “Apply Now” link for their Gold MasterCard, I was taken to a page like this:

screenshot of First Premier application

On the side there, they do mention – albeit in very small print which I have enlarged – that there is a $95 processing fee. If you saw just that, you might be lead to believe that’s the only cost there is for having the account, right?

Not quite.

The $95 processing fee is the tip of the iceberg. You will also be paying a $100 annual fee for your first year, yet for some reason, they forget to mention that in that snippet about the processing fee. And let’s not forget some of the other expenses which are significantly above average…

  • 36.00% interest rate. Of course I know this is a credit card for bad credit, but that’s still incredibly high even for this category. An APR in the 20 – 25% range is probably fair, but 36% is simply beyond the pale.
  • Fees that begin in year two. Sure, some will waive the annual fee for the first year, but aside from that, it’s very rare for a credit card to have a different fee structure for the first year versus the second year. But with the First Premier credit card your annual fee beginning on year two will be lower at $45, but at the same time they tack on a new “monthly servicing fee” of $6.25 (that’s $75 per year). Add them together, the $45 and $75, and that means you will be paying at least $120 in fees annually for the 2nd year and after. This is punitive and somewhat deceptive to have a monthly fee tacked on to a lower annual fee that results in a much higher cost to the consumer.

Schumer boxIt’s true that you will see these fees addressed in the “Schumer Box” (named after US Senator Charles Schumer from New York) which looks like the image on your right.

You may recognize boxes like that because they are required by law. But thanks to a loophole in the law, First Premier Bank doesn’t have to list all of the fees in that big 18-point font table seen above. Instead, they mention a lot of the fees in the fine print disclosures below in a space which few consumers read. And banks aren’t just guessing you won’t read this – they’ve done market research and can statistically count on it.

Specifically, a real shocker that’s tucked away in the mice-type print is the “Credit Limit Increase Fee.”

fee for increasing limit

In a nutshell, they charge you fees for raising your credit limit! Nice. And we’re not talking a small fee, but rather a severe haircut: 25% of the amount that the credit limit is increased. First Premier cardholders probably encounter this fee for the following reasons:

  • The limit you start out with when you open the account is only $400, which is absurdly low.
  • Since this is a credit card for people with poor credit, my guess is that many applicants will want to increase their limit down the road.

So we have this fee which I’m guessing many people will probably encounter. For that reason, don’t you think they should disclose it more prominently on the application, instead of burying it in the real fine print?

And while we’re on the topic, something unusual I noticed about this particular fine print- in my browser I see that it’s only an 11 point font. According to Wikipedia’s entry about the Schumer box, the “other key disclosures” on an application have to be in at least a 12 point font. It’s a little things but it’s illustrative of how this bank operates.

fee disclosure markup

Bottom line: it’s easy to miss the important details

When you go thru First Premier Bank’s credit card application, it’s very easy to overlook important things. If everyone actually noticed these shocking but hidden terms there would be far fewer applicants. Little wonder they tuck them away in the shadows.

I believe there are many who are getting the short end of the stick with this subprime credit card… not because they want to waste money, but simply because they’re not seeing all the nasty things about this product when they apply and are getting taken for a very expensive ride.

This article was written or last updated May 20, 2015

 
Comments
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william kesmodel

I for one can’t see why it takes 6 business days to access available credit, after paying $95 processing fee-no matter how it’s paid-IT’S PAID!

william kesmodel

i for one can’t see why it takes 6 business days to access available credit after paying $95 processing fee-no matter how you pay it!

I can’t even read the FIND print!!

Thank you for the heads-up. That fine print always seems to get me into a lot of trouble.