While watching TV on my day off, I hear the loud thump of junk mail hitting the floor as the mailman jams it through the mail slot. One piece of said junk mail had a firmness to it which typically indicates a credit card offer. I open up the letter and sure enough, it was an offer from First Interstate Bank.
That is if you want to call it an offer. The letter said that I was pre-approved for a $400 credit limit. Not bad, I thought. Then I looked for the “gotcha” and it didn’t take long to find it. The interest rate was a whopping 36%!!! If that wasn’t bad enough, it came bundled with a $99 a year fee just for the privilege of being able to carry the card around and say you have one.
They call themselves lightening the load by allowing you the ability to break the $99 up into 12 equal payments of just $8.25 per month!!! Having had previous experience with another First Interstate Visa with an interest rate hovering around 24% and a similar fee structure, I was quite familiar with the term “being raked over the coals”.
If I had any balance at all, my monthly payment along with the $8.25 monthly maintenance fee left very little cash being applied to the principle of the card. I paid on that card for nearly a year and the money I poured into it each month could barely be noticed. Just imagine that same scenario at 36% APR!!!
Even with a zero balance, the maintenance fee made it nearly impossible to pay the card off for more than 30 days at a time before the next fee was due. God forbid you’re ever late because then you’d be hit with a $35 fee for making a late payment on a payment that you should never have had to pay in the first place!