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Consumer Affairs group says First Premier Bank credit card offer reads like a “satire”
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just signed the new Credit Card Act of 2009 into law on May 22, with stipulations that are meant to improve consumer disclosure of the facts of these offers, and stop some of the outrageous practices of the industry. What it didn’t accomplish, according to some in Congress, is to cap escalating interest rates and outlaw the absurd fees being charged by some banks.
Consumer pluses include: 1) the fact that credit card issuers cannot raise rates under the new legislation on existing balances unless the customer is 60-days or more late. When you do pay six consecutive payments on time, you must again receive the lower rate; 2) you must get 45-days notice for any key contract changes, but this doesn’t apply to your credit limit; 3) You can’t be charged an over-limit fee, unless you approved this option; 4) If you are between ages 18 and 21, you have to prove ability to pay or get a co-signer.
There are other perks you can see at Bankrate.com, which cover double-cycle billing, payments to highest interest rate balances first, extended time to pay, and protections for gift cardholders. Companies also will no longer be able to raise your interest rate based on your payment record with other credit issuers such as utilities, etc. The biggest problem is the fact that 
the new bill does not go into law for nine month.
Phoenix residents will want to know that Senator Jon Kyl from Arizona voted against the legislation.
And coincidentally I just received a mailing from a friend that had recently arrived in the mail from First Premier Bank of Sioux Falls, SD, their official residence due to the extremely lenient credit card laws in that state that apply to issuers. Being an alert consumer, this person pointed out to me the exorbitant fees that First Premier charged. I decided to do some research to see what kind of exposure this was getting from consumer advocates and ran across major coverage by Consumer Affairs.
Fees included in First Premier disclosure statement:
• Account set-up fee: $29 (one-time fee)
• Program fee: $95 (one-time fee)
• Annual fee: $48
• Participation fee: $72 annually
• Additional card fee: $20 (if applicable)
• Transaction fee for cash advances: Greater of $5 or 3% of the cash advance.jpg)
Like they say on TV, there’s more:
• Credit limit increase fee: $25
• Return item charge: $25
• Auto draft charge: $5/$9 per draft
• Express delivery fee: $25 for cards sent Express Mail
• Copying fee: $3 per item
• Internet access fee: $3.95
In the words of Consumer Affairs, “This almost looks like a satire—as though someone sat down and dreamed up as many fees as possible for comic effect.” With a minimum $178 in start-up charges and a credit limit of $300, which CA says was reportedly the average, you only have $122 of credit left. Consumer Affairs received over 15 Internet pages of complaints against this company.
Some of these fees will be limited or even illegal when the new credit law goes into effect nine months from now, but in the meantime, be on the lookout for offers in the mail from First Premier Bank. And read carefully for satiric comedy.
Please leave your comments or E-mail me: jack.dundiv@cox.net
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