MIAMI, FLORIDA – Amy Brown cannot believe her eyes that she has finally been approved for a credit card; although it comes with a mind boggling 79.9% interest rate.
In an interview the 34-year-old woman tells a story of a single mother’s struggle with a mounting debt and child care expenses while struggling with a low paying job.
“While I was slowly paying off my debt, my plan was to get a credit card which could help me repair my credit, “Amy says. “I was denied so many times that I almost gave up. To my surprise I was approved by First Premier Bankcard that arrived in the mail with a $300 limit and a starting rate of 79.9%. The rate was astronomical, and the credit line was not a fortune, but I looked at it as a way to build up my credit” – she said. “I know it’s a high APR but I got the card to build up my credit. It was my only option.”
In 2009, in response to recession aftermath, First Premier Bank launched a new credit card with the 79.9% APR rate. The high rate startled many. However, “The card has actually gained popularity with consumers,” said First Premier Bankcard CEO Miles Beacom, in an interview with Blake Ellis, CNN’s staff reporter. “Since launch, we had nearly 700,000 people signing up for the card.”
Such an astronomical APR rate is a hard pill to swallow for many people, but “The approach is much like high-risk auto insurance," Beacom said in the interview. "If you have a bad driving record, you have to pay more and once your driving record has improved, your premiums will come down when the cardholder's credit score improves, they may start to qualify for more traditional types of credit card offers with better rates and less fees."
Amy’s new credit card APR may be shocking; however, right now it is the only option to get a credit card with a bad credit. Statistics specialist Jon Evans at Creditland.com says: "Our data on most unsecured credit cards from major issuers’ shows that out of 100% of credit card applications, regardless of credit, only 15% actually get approved.
All information related to First Premier Bankcard provided in this article is derived from CNN.com interview with First Premier Bankcard CEO Miles Beacom. Statistical data derived from tabulated data on credit card with a bad credit provided by CreditLand.com
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.