80% Credit Card Fees?
WSB-TV
Sun December 20, 2009
Area: Atlanta
CHEROKEE COUNTY, Georgia - Martha Burnett, an unemployed single mother from Cherokee County, was happy about the new credit card she got in the mail.
But her feelings changed once she saw the terms.
"I was thinking I could charge some stuff and rebuild credit, but I'm not going to be able to keep the card because of this ridiculous rate they're coming up with," said Burnett.
The card, which has a $700 credit limit, also carries an immediate $200 in fees.
But starting in February, First Premier Bank will offer a new program that has fewer fees, but an interest near 80 percent. Channel 2 Action News consumer investigator Jim Strickland asked Burnett what she thought after seeing the interest rate.
"They got to be out of their mind. I was flabbergasted ...it's just terrible," said Burnett.
John McCosh with the Consumer Credit Counseling Service said his staff advises subprime customers to build up savings rather than desperately sign on to an expensive card.
"Lenders are going to find a way to make money off people from the bad end of the borrowing pool," said McCosh.
First Premier Bank's CEO defends the new program, saying in a statement: "We need to price our product based on the risk associated with this market and allow the customer to make the decision whether they want the product or not."
When Strickland posted a message online looking for First Premier clients, he got more than two dozen e-mails in just a couple of hours.
"The customers are the ones they should be trying to help...they're really not helping us, they're hurting us," said Burnett.
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