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From Bankhead to Buckhead...
Real life, real strategies, & realities experienced and explored by a young Black woman navigating the Western world...
First Premier's Platinum card, aimed at consumers with poor credit, not only boasts a sky-high 36% APR but it also comes loaded with some of the highest fees in the credit card industry, said Odysseas Papadimitriou, CEO of CardHub.
First Premier, which has 2.6 million customers and sends solicitations to 1.5 million consumers each month, says it is helping consumers who would otherwise be rejected by most credit card issuers and therefore needs to price in risk by assessing high fees and interest rates.
"All of our products are priced based on the risk associated with offering the product to these individuals, many who find themselves at the lower end of the credit scale," CEO Miles Beacom told CNNMoney in an email.
When First Premier increases a customer's credit limit, it charges 25% of the amount by which the limit is increased. Customers can apply for a credit limit increase any time, but can't receive an increase until they have been a customer for 13 months. Increases range between $100 and $200.
If the cardholder's limit is raised by $200, they pay a $50 fee. Customers have 30 days following the credit limit increase to contact First Premier if they want to cancel the increase and get the fee refunded.
Taking this and other fees and interest into consideration, a customer who gets a $200 credit limit hike and has a revolving balance of $500 would end up paying $453 per year to use First Premier's Platinum card after the first 13 months of owning it -- including $180 in interest with its 36% APR, a $50 credit limit increase fee, an annual fee of $49 and $174 in monthly fees. During the first year, the annual fee is $175 and monthly fees are waived.