Although the unsecured credit cards from First Premier bank regularly rank as the worst of America’s credit cards, the current batch of secured credit cards the bank offers are a noticeable improvement. With the stricture of a security deposit in place to protect the bank against defaults, both the First Premier Secured credit card and its Centennial Secured credit card, represent a viable option for those seeking to build or rebuild a credit history.
The two secured credit cards are also advertised as a means of establishing credit, but those new to credit cards would be better advised to avoid the sub prime lender and seek out a more mainstream credit source to establish their credit reputation with.
The terms and conditions on each of First Premiers two secured cards are identical, so applicants have nothing to choose between them apart from the design of the cards. Each card requires a minimum security deposit of $200 in order to obtain a minimum credit limit of $200. However the annual fee of $50 automatically reduces the available credit by $50, representing the allowable 25% on a credit limit of $200.
First Premier considers increasing credit limits after 13 months for eligible customers who have maintained their account in good standing. All credit limits must be supported by a security deposit which mirrors the credit amount offered, up to a maximum of $5,000. Card holders need to be aware that a fee of 25% of any credit increase is applied when credit limits are increased.
The APR is a modest 19.9%, a good rate for those who have bad credit histories. Cash advances are also charged at 19.9% and carry a fee of either $5 or 3%, whichever is greater. The cash advance fee is capped at $10. However cash advances are limited to 10% of available credit for the first 90 days, increasing to 50% after this period. Considering cash advances do not offer the usual interest free grace period of 27 days it is a good practice to never use credit cards for cash advances, so the limit imposed by the bank is a good move to discourage the practice.
Other typical charges applied to First Premier’s secured cards are a one of $3.95 internet access fee, $3 for copy paper statements, and a foreign exchange fee of 3%. The small print reveals that neither cash advance nor foreign exchange fees will be assessed for the first 12 months.
The primary problem with secured cards from First Premier is that many of their typical customers don’t read the terms and conditions and thus fail to understand that a security deposit is required. Providing the terms outlined are understood the cards can help those with a bad credit history to rebuild their financial reputation, providing all payments are made in a timely fashion and conditions are not breached.