Big banks are getting tarred and feathered all over the place these days, but BOA and Chase can’t be at the centre of all the bad news. Credit card comparison site CardHub.com is putting the spotlight on First Premier Bank, home to what it says are two of the nastiest credit card fees on the market right now:
25% credit limit increase. If you ask for and receive a bump in your credit line, First Premier will charge a whopping 25% of the limit increase, according to Card Hub. That’s a $50 fee for a $200 line increase. And the only way to get rid of it is to turn down the bank’s limit bump within 30 days.
“The fine print of their card agreement gives them the right to both grant credit limit increases and charge the corresponding fee unsolicited,” says Card Hub CEO Odysseas Papadimitriou. “When you consider this together with the fact that customers have a limited window to request a reversal of their limit increase, First Premier could very well pull a fast one.”
We couldn’t get in touch with a First Premier rep this afternoon, but here’s one guess as to why they’d do this:
The bank’s website says its customers typically come to them with pretty badly damaged credit looking to rebuild. They keep credit lines low – around $300 – “so that these individuals are not put in a position to further hinder their financial progress.”
And threatening them with a 25% fee is certainly one way to dissuade people proven to have bad credit behaviours from upping their limits.
$170 in first year fees. Next up, Card Hub points out that the main card on FirstPremier.com charges $170 in first-year fees – 56.6% of its $300 credit line. It boggles the mind to think this could fly after the CARD Act capped first-year fees at 25%, but CardHub breaks it down:
“The limit currently only applies to fees charged during the first year an account is open because the courts granted First Premier’s request for a preliminary injunction to the Federal Reserve’s October 2011 amendment to Regulation Z that would include fees charged before an account is open as well. Legal nitpicking aside, the reason why this First Premier fee is bad is that instead of paying a $170 non-refundable fee for the right to use a credit card, with $30 more, consumers can simply put their cash toward a secured card’s security deposit, which is completely refundable.”