VIP Subscribing Member
Diamond VIP Contributor
- Aug 9, 2004
- Reaction score
- Charleston, SC
http://www.nbcsandiego.com/around-town/shopping/No-Youre-Reading-That-Right-64173667.htmlGordon Hageman couldn’t believe the credit card offer he got in the mail.
"My first thought, it was a mistake," Hageman said.
The wine distributor called the number on the offer, gave them the offer code and verified his information. Sure enough, it was right: the pre-approved credit card came with a 79.9 percent APR.
Yes, 79.9 percent.
This is a sub sub sub prime credit card issuer - they're pretty bad. I guess the pure capitalists would argue that the rate is published and the bank is taking a big risk on these people so they should charge a high rate. I guess I can see that side of it, but when you look at the macro of what the bank does it's pretty sleazy. They issue these cards with very low limits, like $300 - this limits their exposure rather significantly. Then they take in very high interest gains, particularly because the limits are so low that even with a full credit limit default ($300) plus penalties and interest, the amounts owed are low enough that most people can eventually pay it off to get it off their credit report.
But wow. I'm pretty sure that this bank is in South Dakota, which apparently has no usary laws whatsoever.