CNNMoney is reporting that a new credit card could end up costing customers up to $400 per year just to use the card.
Sadly, this isn't shocking. Credit card companies continuously try everything they can to squeeze money out of their customers. The very people who keep their businesses profiting are the ones who end up suffering. Modesto bankruptcy attorneys have seen this happen many times.
And often bankruptcy in Modesto is an answer to the aggressive and predatory nature of credit card company tactics. Through bankruptcy, a consumer can eliminate large amounts of credit card debt.
This allows them to prepare for their financial future while helping them today. Filing for bankruptcy provides instant help for consumers through what's called an automatic stay. This action stops creditors and debt collectors from harassing consumers.
So, the hours of automated calls, harassing emails and letters that threaten legal action and wage garnishments come to an end. These actions are barred from happening and creditors must make a court appearance and file certain motions in order to be able to contact the debtor directly.
According to the news article, First Premier's Platinum card is aimed at consumers who have bad credit. It has a ridiculously high 36 percent APR and has some of the highest fees among all credit cards, analysts are saying.
A common myth of bankruptcy is that people who file are unable to get credit. This myth is easily disproved. Consumers who file for bankruptcy often get credit card offers as soon as they finish the process.
In some cases, these offers aren't very good, such as the First Premier Platinum card. But consumers will have the power to pick and choose whether they want to take these initial offers or leave them. They may choose to consider a secured credit card, where the consumer deposits money that will be act as a spending limit.
There are different ways to quickly build back credit after bankruptcy. Consumers shouldn't necessarily dive back into getting a credit card, unless it's with the plan of re-establishing credit and using bankruptcy protection to try to get back on track.
The news article also points out that First Premier has 2.6 million customers and solicits another 1.5 million each month. The company says that it is helping consumers who otherwise would be too risky to be offered credit. Therefore, they are balancing that risk with the higher rates.
And if a consumer seeks an increase in credit, they are charged 25 percent of the amount of the increase. So, if the consumer gets an additional $500 credit, they must pay the company $125. Between the high interest rates and the loads of fees, this card could spell trouble for consumers trying to get back on their feet. But this company isn't alone in offering high-interest, high-fee cards.
Consumers who have used bankruptcy to help their finances must be cautious about how they go about rebuilding credit. All consumers must be careful, as creditors are always looking to make a buck.
If you or someone you know needs to speak to an experienced and knowledgeable bankruptcy lawyer in Modesto or Stockton, contact the Law Offices of Robert J. Anaya for a free and confidential appointment. Call today 1-209-522-7500.
More Blog Entries:
Consumers Increase Credit Card Debt in Modesto, Nationwide to Start 2012: January 10, 2012
First Premier's $400-a-year credit card, by Blake Ellis, CNNMoney