The T. Denny, Mike Huether, Bill Janks of South Dakota and their history. This is from 10 years ago, but worth the watch. I had a brief convo with Bill Dougherty about this one day when giving him a lift, I learned more in those 7 minutes then I have ever in my life about what happened.
This card made our list of the worst cards two years ago, and it doesn’t look like it has improved. In 2007, First Premier signed a $4.6 million settlement with the New York Attorney General’s office over the card’s deceptive marketing practices. First Premier’s card now advertises a $25 to $95 processing charge (which fluctuates by the minute, depending on when you click on the card’s website). What’s worse is that when you drill deeper into the fine print, you’ll find a $75 annual fee and an APR of 23.9 percent to 59.9 percent on purchases and cash advances (again, depending on when you visit the site). So you could face a minimum of $100 or a maximum of $170 in fees in the first year for a card with only a $300 initial credit limit. Other fees include an $11 charge for expediting bill payment over the phone and a credit-limit increase fee equal to 50 percent of the increase. So for every $100 that First Premier increases your credit limit it charges you $50. Also, look out for copycats of this card. First Premier Bank markets very similar cards under the names Centennial and Aventium.
More yummynest. I’m sure glad we elected a mayor that is from this company’s marketing department. I sleep better every night knowing this. It reminds me of Monday afternoon when Huether talked about our city’s great debt management. It sounded like one of those letters from First Premier telling you how great your credit is (even though nobody else was giving you a loan).
THEN: Banks could charge as much as they wanted. They could assess annual fees, activation fees and other fees. This was mostly a problem for subprime cards marketed to those with poor credit scores. One popular card, for example, the Premier Bankcard, charged $256 in first-year fees for a $250 credit line.
NOW: Service fees, such as activation and annual fees, will be capped at 25 percent of the credit limit during the first year of use. After that, there is no cap.
There is a lot more of this kinds of crap throughout the legislation. Seems like the CC industry will be doing just fine for a very long time.
UPDATE: On a similiar note, fellow SF Cartoonist John Daiker has entered a cartoon contest (his entry below) you can vote for him HERE.
I started thinking about this the other day when someone who knows T. Denny told me that Sanford is considering closing down First Premier’s CC operation when new legislation goes into place. They really don’t have much of a choice, but I found this story comical, but not surprising (The bank is actually First Premier bank not Premium bank like reported – H/T Helga):
CA credit card has 79% interest rate
Posted: Oct 19, 2009 6:50 AM PDT
14 Posted by Rachel Folz -
(NBC) – “The first thing they do is laugh. They think it is one of the most ridiculous things out there.”
Gordon Hageman is talking about a credit card offer that just came in the mail, an offer he could hardly believe.
“I think they are trying to take advantage of me. I think that’s what’s going on right now with the economy, maybe just trying to see what they can get away with,” says Hageman.
And this card comes with an interest rate you won’t believe. Not 20 or 30 percent, not even 50 or 60 percent, the mastercard offer from Premium Bank in South Dakota, 79.9 percent.
“My first thought was it was a mistake so I called the 800 number on the back of the offer and gave them the offer code and verified my information and sure enough they verified it at 79.9 percent,” says Hageman.
“Gosh, I hope nobody would do that. I hope nobody would say I’m going to sign up for this card without even looking at the interest rate,” says San Diego State University Marketing Professor Michael Belch.
But there’s nothing in the letter that tells you the interest rate. For that, you have to read the fine print.
Belch says, “I think you’re beginning to border on deception there.”
San Diego State Marketing Professor Michael Belch says card offers like this are usually targeted at people struggling with their credit, the card comes with a $300 limit and a $75 annual fee.
“Anyone looking to rebuild their credit probably going to end up worse shape that probably before they got this card,” says Belch.
But, South Dakota Governor Mike Rounds says part of the new law could actually hurt the state’s credit card industry, and could potentially cost South Dakota thousands of jobs.
“I’m concerned, first of all, in terms of jobs in South Dakota, we may find 3,000 people without a job if this gets to be as bad as some have suggested,” Rounds said.
Add that to 3,000 from Morrells and the other layoffs and you are looking at 6,000 jobs lost within a few months. Not good at all. I’m not an economist, but I am also not a dummy, this will suck, big time. You might see Sioux Falls actually decreasing in population for the first time in decades.
I guess we should be glad we are rated 4th in the nation for fast food joints, the dollar menu at Mickey D’s is looking better everyday.