Check out this credit card offer my daughter received...

[Left Is Write]

What a ripoff.

APR: 9.9%

Account Set Up Fee: $29 (one time fee)
Program Fee: $95 (one time fee)
Annual Fee: $48
Participation Fee $72 annually (billed at $6 per month)
Additional Card Fee: $20 annually per card
Credit Limit Increase Fee: Each time your account is eligible and approved for a credit limit
increase, a $25 fee is imposed
Copying Fee: $3 per item
Internet Access Fee: $3.95
Wire Transfer Fee: $5 per transaction
Autodraft Fees: We impose an $11 charge for each payment made through an autodraft service we
provide. Autodraft payments requested through our automated systems (Voice Response
or Internet) are assessed $7 per transaction


I got a headache just looking at it. The offer has been shredded, but how many young, naive kids like my daughter would have fallen for it? Or how many people desperate for credit will fall for it?

My daughter already has a Visa, issued through our bank, with a reasonable limit, reasonable rate, and no fees. Goodness knows she doesn't need a scam card like this one.

[underpants]

1. Just for signing up she would go $198 in debt

from the way I figure it. Gee sounds GREAT!

[Left Is Write]

2. Exactly!

$198 just for accepting the card!

And a $3.95 internet access fee? $11 for autodraft payments? $7 for online or phone payments? I manage my accounts online for free. Seems to me this type of offer is designed to target and reel in those who can least afford those rip-off fees.

[jobycom]

6. $25 fee every time they increase her limit?

Wanna bet her limit would go up a hundred bucks every month?

[MadHound]

3. Why does your daughter even need a credit card?

Hell, between student loans and what have you, she is going to saddled with a few thousand dollars of debt when she comes out of college anyway, why burden her even more with a credit card?

I've lived all of my life, including going through college, without a credit card, and am glad that I have. It is no big burden to do so, and in the long run it is a good thing. If you want her to have some plastic for emergencies, open up a joint account with her and let her have that emergency debit card. But saddling somebody just starting out in life with a ton of CC debt is just wrong.

[xmas74]

4. A small credit card is fine.

One w/ a very small line of credit (like $250 or $500). It's enough to teach them to pay everything back in a timely fashion and build up their credit history.
Myself, I hate credit cards and I no longer have one. But in some places they are needed in order to even rent a place. (check out thread below)

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=105x4530747

Sadly, that's not the first time I've heard of this.

[MadHound]

8. Interesting thread, I've never heard of a credit card as a requirement

For renting a house. I've heard of a credit card being a requirement for renting a car some places, but have never run into that problem myself.

And one doesn't need to have a credit card in order to build a good credit rating. I have an excellent credit rating, have never been denied a loan, and never had a card. Pay your bills on time, pay your loans on time, and your credit rating will be great. You don't need a card to do that.

And generally that "small card to teach them to pay bills" winds up being a huge disaster. Young first time card owners are the most likely to get into serious credit card trouble, racking up late fees, service charges ,etc. etc. on even cards with small limits. And that is a mark on your credit record that will follow you around for a long time.

Sorry, but I think credit cards are worthless and aren't worth the pain and hassle for what you give in return. If you don't have the money for something, save for it. It is those sorts of lessons that a kid should learn now.

[xmas74]

16. I tried to rent an apartment about an hour east of KC

(college town) and they requested a credit card, stating that they do a monthly transaction directly from the card for the rent. And they would not take anyone w/o a card. That was three years ago and I've heard college students in my area state that more apartments are going this route.
I don't use credit unless I have to. And I do have decent credit but in this day and age more and more places are asking for credit.
A small line of credit is just fine if you teach yourself control(such as "I won't use this unless I have more books that I need to buy for my classes." "I have to drive home for a family emergency and I don't have the gas money. I'll use just enough for gas.") It can teach responsibility but should only be used for emergency purposes and not to spend on a night out.

As to saving it-when I was a college student I saved my money every semester for books. I priced them out early in the year and figured out how much they would cost. Yet every time I went to purchase books for the next semester a professor had changed the textbook or added a new book to the list and it was never something cheap. It was always something you HAD to have in order to take the class (I took a macro economics class years ago and the professor had changed the textbook. I almost had the money but was short $35 and I came from a family that could not afford to help me out. I explained to the professor that I would have the book in the next week or so and could borrow from my room mate. The professor informed me that if I did not have the book by the second class I would have to drop the class. I had to drop the class.)
Things happen. If you learn to use credit responsibly you will be fine w/ a small line on a credit card.

[MadHound]

17. Sorry, but when that becomes the norm around here,

I will do what I've done in other such circuastances, take the bastards to court. It is mandated by law in this country that while a business doesn't have to take a CC or check as payment, they do indeed have to take cash. I've threatened a couple of businesses who tried this BS before, and they have backed down and taken my cash.

College students are the single largest demographic that gets into trouble with CC debt. They have more late fees, user fees, higher interest rates etc. They are a cash cow for credit card companies, and CC corporations know it, spending over a billion dollars a year targeting this demograhic. In addition, this lead to the student graduating with a large CC debt, and starting real life with a burden when they can least afford it.

And for emergencies, like I've said earlier, there are other options, a debit card, or a pre-paid card. But in my opinion, and that of many others more knowledgable on this subject than I, letting a college student have a credit card is just begging for trouble.

[xmas74]

18. The places to rent from around here will find other

reasons not to rent to you. Like I said before, I no longer have a credit card but have in the past. I was a college student when I received one (a student w/ a fulltime job). I used it only for books that I didn't have enough money to purchase and one family funeral that I had to travel for. The books too two months to pay off (chose to skimp on food instead) and the family funeral took three months to pay off. Both were last minute things and I needed the money. I haven't had a card of my own since.

As to rent-I moved back in w/ my parents for the time being. I am saving my money to buy a small trailer outright so that I will never have to worry about a landlord telling me how I will pay the rent again. But rents in this town will keep going up and more places will demand that you use a credit card to pay the rent. That's a fact and no matter how much I fight it I'm not going to win. Many places around here prefer cc or will find someone else to rent to(some will also accept BAC or a direct payment for low income like Section 8. Most are advertising only to college students or military and do not want anyone else in their apartments).

[MadHound]

20. Well, I wish you the best of luck

However if I were in your shoes, I would take the bastards to court, but then again I'm just like that.

I don't have to deal with the rental market, hopefully for the rest of my life, since I own my place now and have no intention of moving. Wish I had known you were wanting a trailer, I had one for sale until three days ago. But the transport costs from Callaway County to Warrenberg would have been prohibitive. Hope you find one soon, and remember to put tie downs on it, this is tornado alley after all.

[xmas74]

21. I don't really want a trailer

but they are inexpensive and a good starting point for owning your own home. I've found some in the area (old but still livable and better looking than a few houses I've looked at) starting at $3000.
Warrensburg is well-known for its tornados. We suck them in either from 50 or 13 hwy-sometimes both ways at the same time! Good thing I have family in town w/ a nice basement and a pool table to occupy us during touchdown.

[MadHound]

23. That's the way I started out,

Bought a used trailer cheap 19 years ago(wow, that long ago!), and saved up for a little 900 sq ft starter house six years later. Stayed in that house in Columbia for ten years, and then moved out to the country two years ago, and if I can help it, I'm not moving again.

Glad you have a handy basement, because I think all of Missouri is tornado alley. I've lived here all of my life and been through eight of the things, once even in my trailer(nothing like watching the walls "breathe" and praying that your place holds together!)

Good luck on your search. Oh, one other thing before I forget. Check and see if there are any HUD community block grants still available for your area. If they are, and you qualify as low income, they're a great way to get your first house. The grant will pay half of your down payment, and waive your credit history. Probably not around anymore, thanks to Bush, but you never know, it's worth looking into.

[xmas74]

25. Tried that.

At the time I didn't qualify.
I'm thinking I'd be happier starting in a trailer. I like the idea of not owing any rent every month. And I've talked to one of the "nicer" trailer parks in town about paying a lot fee once a year (around tax time). They said if I did that they knock three months off of my fee each year if I signed a two year lease. Not too bad plus they have a nice playground, a pool, fenced-in yards and a couple of large underground stomr shelters for the residents to use in case of a tornado or a severe storm. And Warrensburg gets them worse than some places in the state. In 2003 (during that "May sweeps" of tornados) we had 38 touchdowns that week. None were that bad but there was damage done to farms and families that lived in their basements and cellars for the week.

[Left Is Write]

7. Excuse me, but ***I*** did not "burden her...with a credit card."

She's an adult. She applied for and received the credit card from our bank all by herself.

Besides, I see nothing wrong with having a credit card for emergencies.

But saddling somebody just starting out in life with a ton of CC debt is just wrong.

She doesn't have ANY credit card debt. And I didn't "saddle" her with anything.

[xmas74]

11. See my response above

for a couple of good reasons for a young adult to have a small line of credit.
I'm on your side on this one.

[MadHound]

15. Excuse me, my bad

From the tone of your original post I thought that you did indeed have some hand in getting her a CC.

But the trouble with a CC is that the excuse of "having one for emergencies" will soon fall apart. School expenses, books, lab fees, some new clothes, the occaissional night on the town, all of these will start to add up and before she knows it, she'll be in some serious trouble. It isn't that she isn't a bright, responsible kid, I'm sure that she is. But for the young especially, credit cards are a huge trap. I live in a college town, and if I had a dime for every college student who wound up on the wrong side of CC debt in the past ten years, I would be a millionaire by now.

Look friend, I didn't mean to push any buttons or degrade your daughter. I'm just pointing out the well known fact that college kids with credit cards usually wind up hip deep in CC debt by the time they graduate, and many many of them struggle to get out of that hole for a large portion of the rest of their lives. It is a burden that nobody starting out in life needs. Like I said earlier, if this is to be emergency plastic, open a joint account with her and let her have a debit card. Then not only will she not have to wrack up some serious CC debt, you will also be able to monitor what her situation is a little more closely while she is still finding her bearings in life.

[crispini]

19. I had one as a college student.

I did fine, no debt. :shrug: And I was awfully glad to have it sometimes.

[Left Is Write]

22. First, she lives at home.

Second, I have no need to open a joint account with her. She has her own checking account, her own savings account, her own debit card, and her own credit card. She also has gainful employment.

She will not be getting the scam card I described above.

I wrote the OP in astonishment over the fees involved in that so-called offer (and, frankly, I think those types of fees should be illegal), not to solicit advice for how to handle credit.

[YOY]

14. There is no time like your teen years to start earning

Your Citizen Worth #! (Aka your credit score...)

Just makes the movie "Fight Club's" premise all the more valid...

[Deja Q]

5. Why do you hate America?

(I think that's the stock response)

In seriousness, they're really racking up all sorts of entry fees - half of which I never fathomed existed before!

Internet access fee, additional card fee, a HEFTY annual fee, "participation fee" :wtf: (for those who use the card RESPONSIBLY, to ensure the bank gets money regardless? Fuckin' bloodsucking leeches...)

CREDIT LIMIT INCREASE FEE?!?! Sweet Jesus of Jezebel, that is outrageous - they always increase limits if you show the "right characteristics" (which is just about anything except delinquent)

Autodraft fee? Why?

Account setup fee + program fee seems REDUNDANT.

Write back to them and tell them where they can shove their card... or who is this degenerate bank anyway?

[Left Is Write]

9. I never even heard of the bank.

First Premier.

They just look like charlatans to me.

[EstimatedProphet]

12. First Premier are charlatans

They have a reputation for doing just what you described here-they give you a credit card that is maxed-out at the start, so there is no real line of credit.

[Left Is Write]

10. dupe

[Divameow77]

13. I expect

they think most people won't get past the 9.9% rate.

I would rather have a 18% rate then all those fees.

[ucmike]

24. open a 29% account and get a free t-shirt or hat!!!!!!

at asu they would set up these booths on the main campus trying to get college students to sign up. in exchange for filling an application they'd give you a shirt or hat with their logo on it. sweet.
(side note: the was a bar near the asu campus that showed up as "the bookstore" on credit card statements, allowing students to tell mom and dad that they were only using the card at "the bookstore".)

what's worse is that i still get college oriented card offers and i graduated in '97. i got one a few months ago that offered to give a percentage of my spending to my alma mater. i fired off an email telling the admin there that i really didn't appreciate them selling my name to a credit card company so they'd get a kickback. i know it was associated with the school because they had the school logo on the card. no response from the admin on that email, strangely enough.

corrupt, profit oriented universities allowing credit card companies to prey on students. that's the way i see it.