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At that same time, First Premier Bank launched a new credit card with the sky-high 79.9% rate.
The card proved popular with consumers, said First Premier Bankcard CEO Miles Beacom, but the performance was bad: "A lot of the people ran up the card, defaulted and went directly to charge off."
As a result, they dropped the rate to 59.9%. "We also tested it at 23%, 33%, 45%, but 59.9% is the one that shows the best performance and where the organization can market the product," he said.
Since then, nearly 700,000 people have signed up for the card -- and more than half of them carry a monthly balance.
And yes, that rate is completely legal. The Card Act, which was passed in late 2009 to protect consumers from predatory lenders, only prevents issuers from raising rates retroactively. Credit card issuers are free to charge whatever rate they want at the front end.
Representative example: £300 loan repayable over 52 weeks 52 weekly payments of £10.50 Rate of interest 82.0% p.a. fixed; Representative 272.2%APR Total Amount Payable is £546
Originally posted by Maxmars
I've been wondering.... it seems that any countries the transnational banking cartel owns all hate Muslim countries....do you think it's because of the Islamic prohibitions on usury?
All the "western" religions accepted the notion that the middleman should get rich holding onto other people's money, despite their "Holy" texts.... But Islam seems to hold dear to the notion that it is wrong..... (I tend to agree, generally speaking.)