First premier credit card
First Premier Credit Card Review: Bad Option for Bad Credit
If you have bad credit, you’ll often be urged to get a secured credit card. These cards require a cash security deposit, usually equal to your credit limit. The First Premier Bank Credit Card is one of the few unsecured credit cards designed for people with bad credit, meaning you can skip the deposit.
But even though tying up money in a secured card deposit isn’t ideal, the cost of carrying the First Premier Bank Credit Card is so high that a deposit pales in comparison. And unlike a deposit on a secured card, which you get back when you close or upgrade the account, the fees you pay to First Premier are gone forever.
Because of the high fees and annual percentage rate, we recommend that you avoid the First Premier Bank Credit Card, but a couple of alternatives may be worth your while.
Why the First Premier card is so costly
When you have bad credit, a higher APR and extra fees are not uncommon. Card issuers see you as a higher risk and will charge you accordingly. But the First Premier card takes these charges to a new level.
The fees include processing fees, annual fees and monthly servicing fees, which vary depending on the credit limit you have. The day we looked at the terms and conditions, the credit limits ranged from $300 to $1,000 (see table below).
The fee parade begins with a one-time processing fee, which must be paid before the account is opened. Next comes the annual fee. Bringing up the rear is a monthly servicing fee, waived the first year for credit limits up to $500. For example, a $300 credit limit will run you a total of $170 the first year and $120 a year thereafter. Some of the best rewards credit cards don’t even charge that much. See the chart below for details on each credit limit. Also, if you want a cash advance, you’ll pay 5% or $6, whichever is greater. Here’s how the fees break down based on your credit limit:
|Credit limit||Processing fee (paid before account opens)||Annual fee||Monthly service fee|
|$300||$95||$75 first year, then $45 annually||$0 first year, $75 annually thereafter (billed $6.25/month)|
|$400||$95||$100 first year, then $45 annually||$0 first year, $75 annually thereafter (billed $6.25/month)|
|$500||$95||$125 first year, then $49 annually||$0 first year, $124.80 annually thereafter (billed $10.40/month)|
|$600||$75||$79 first year, then $49 annually||$70.20 first year (billed $5.85/month), then $99 annually (billed $8.25/month)|
|$700||$55||$79 first year, then $49 annually||$96 first year (billed $8/month), then $124.80 annually (billed $10.40/month)|
|$1,000||$25||$79 first year, then $49 annually||$96 first year (billed $8/month), then $124.80 annually (billed $10.40/month)|
While most credit cards for bad credit from major card issuers have comparatively high APRs, none of them come close to the First Premier Bank Credit Card’s APR of 36% for purchases and cash advances. (For cash advances, you’ll pay the 5% transaction fee noted above and the 36% APR.) Carrying a balance on this card can get you into financial trouble quickly.
Costly credit limits
Credit cards for bad credit tend to have low credit limits. When your limit is only $300, for example, you don’t have much room to use the card — and when you do use it, you can easily use up most of your available credit, causing your credit utilization ratio to spike and potentially hurting your credit score. This is a consideration with most cards for bad credit. But First Premier throws in an extra hassle: The bank may increase your credit limit after your account has been open for 13 months — but it will charge you a fee of 25% of the increase upon approval. For example, if you receive a $200 credit limit increase, you’ll be charged a $50 fee. Cardholders may reject the credit limit increase and have the fee reversed, but they must notify First Premier within 30 days of the billing statement that shows the increase and the fee.
In most cases, a secured credit card is a good choice while you’re getting back on your feet credit-wise. The downside to secured cards is the deposit. Although this means you’ll have some cash tied up while you’re using the card, you’ll typically get it back when you close the account, sometimes with interest. Here are two secured cards worthy of consideration.