Got an offer for a First Premier Card

First Premier terms:
Account Set-up Fee: $29.00 (one-time fee)
Program Fee: $95.00 (one-time fee)
Annual Fee: $48.00
Participation Fee: $72.00 Annually++
Additional Card Fee: $20.00 Annually per card, (if applicable)


Keep in mind that you are paying up front $29+95+48 = $172 up front,
plus an additional $6/month=$72/year, for $244 in fees the first year,
and an additional $6/month=$72/year + $48/year = $120/year,
on top of interest.

So if you got a credit limit of, say, $500, and you carried a balance of $500 for a year, your APR would be 49%+10% interest = 59% APR for the first year,
and 24%+10% interest = 34% APR for each additional year.

You are paying stiff fees just to have the card.

In short, you would at best only want to use this to reestablish credit, and would not want to do this for any extended length of time. Given a choice, a secured credit card with a credit union would be a better alternative.

 

If you have ALREADY applied, and been approved, you might just go thru with it knowing how much you are paying up front, and aware that your purpose is purely to establish a positive credit history over the next year to step up to something better. You are basically paying a couple hundred dollars to buy the chance at some positive credit history.

The problem with backing out is that you already have the inquiry, which will affect your scores for maybe the next 6 months, you are already being billed for the fees, and you will probably go around with them over whether you get stuck with the fees if you simply back out and ask for the account to be closed. Right or wrong, you don't need that hassle and possible damage with your scores.

On the other hand, if you have NOT applied, you might look into establishing a secured card account, possibly thru a credit union. You may tie up a similar amount to the fees charged here, but it is still your money, and after a year or so of responsible usage, you may be able to get an unsecured card, and get your security money back.

As to the math, just add up the total paid toward fees and interest over a year, divided by a hypothetical balance carried, convert to percent, and that is your APR. It is not quite fully accurate, since it does not fully account for compounding and the time value of money, but it is close enough for most comparison purposes.

The less you actually borrow, the worse it looks as an APR, reflecting that it is really fixed fees, not interest depending on the balance. Due to the high fees, you are paying a stiff price just to have potential access to limited credit, even when you are not using it. But it at least gives you a point of reference against your eventual goal, which is to have access to credit at reasonable interest when you actually use it, and with no junk fees for the privilege.

Used the way you intend to use this card, a secured card even with a higher interest rate would be a better deal than this card with high fees and 9.9% APR interest, assuming you can afford the deposit.

The other aspect of your choice is whether it opens up a better choice in the future. A secured card with the right lender may lead to an unsecured card with that lender. A sub-prime card with this lender may depend on any effect this account has on improving your scores to get a better card with a different lender in the future. There are advantages to developing credit relationships with lenders that will do both the sub-prime or secured account you may need now, and a better term account you may be elligible for in the future.

 

When I calculated the interest for my own first premier with the fees and all, I came up with 84%.

A much better bet is a National City secured card, which you have to call them for an app.

1) They're a prime bank.
2) Min deposit is $250; max is $2500. Takes about a month to get from time they cash your check and pull your credit.
3) Annual fee is $36 billed as $3/month.
4) Reports as unsecured to all three CRAs.
5) They do convert some people, however, you'd have to qualify for their regular card at time of conversion AND apparently they'll open this as a new tradeline. They are picky, though, so don't expect it unless your scores are above average (720) when you ask.
6) They won't approve someone actually in BK, but they do approve almost everyone else (I haven't heard of anyone being declined). This is in marked contrast to Wells Fargo and Bank of America, whose secured cards are fairly hard to get.

You have to call for an application. Phone # is 800-762-0974.

 

720 would be for their unsecured, not their secured.

 

[
One last thing, I really hope I didn't make a mistake, but, I did it one day before I discovered this site. I disputed EVERYTHING on my credit report that was bad as "not mine" on all three bureaus. Are they gonna dismiss it as frivilous? There were about 11 or 12 items, all with a start date around 2001/2002.

Thanks, and GOD I LOVE THIS FREAKING SITE!!! I truly believe it is gonna change my life![/QUOTE]

I don't know may be it would be useful for you check http://www.bestcreditoffers.com/Bad-Credit-Card-Offers-889478-page.php

 

No point in speculating, or worrying. Just see what happens, and respond accordingly.

You might take a closer look at each account, look for errors, and focus on disputing those. Or wait 6 months, and try again differently.

Either way, every improvement helps, and in a year or so, they start falling off by themselves, assuming the date of first delinquency was in 2001.