Please Don’t Get a First Premier Credit Card

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The Aventium and Centennial credit cards, offered by First Premier Bank (or 1st Premier), are among the very few credit cards offered to those with bad credit and may seem attractive to people who don’t qualify for almost any other card. However, the cards come with a low credit limit, unreasonably high fees, and a number of “gotcha” charges that riddle the cards’ fine print. In fact, the two cards are exactly the same – always a red flag. The Federal Reserve tried to make lending more transparent in 2010. First Premier did an end run around them, and Aventium and Centennial are the results.

1st Premier’s “perks” for Aventium and Centennial: high APR and higher fees

The two credit cards come with an astronomical interest rate: 49.9% the first year, with the possibility of a minor reduction to 39.9% thereafter. For comparison, the industry average for those with poor credit is 23.95% – less than half of the Aventium/Centennial’s. First Premier is notorious for its high interest rates: previous iterations of the Aventium and Centennial came with 79.9% and 59.9% APR’s, but were yanked after public pressure.

First Premier Aventium security deposit

The cards also have a $75 annual fee the first year – 25% of the cards’ credit limit, the maximum first-year fee allowed by the Credit CARD Act of 2009. Essentially, the card only has a $225 credit line, after fees. That fee is lowered to $45 a year after that, but is supplemented by a $6.50 monthly fee, for a total of $123 a year – more than one-third of the credit limit.

These unsecured cards come with a secret: they’re actually secured credit cards. In the cards’ very, very fine print is a requirement that account holders make a “security deposit” of $95, which will be refunded when the account is closed. This makes the cards almost like secured credit cards, but with even higher fees and interest rates!

First Premier vs. the Fed: a cat-and-mouse game

Before the Credit CARD Act, First Premier’s terms were even more egregious. An unsecured Visa with a $250 credit limit included:

  • • A $35 processing fee
  • • A $119 acceptance fee
  • • A $6 monthly fee ($72 a year)

That adds up to $276 in fees – more than the credit limit. The CARD Act stipulated that the first year’s fees can be, at most, 25% of the card’s credit limit, prohibiting this practice. The Visa could cost, at most, $62.50 in the first year.

Not to be deterred, First Premier issued a set of $300 credit limit cards with a $75 annual fee: identical triplets Aventium, Centennial and Classic. In addition, 1st Premier began charging $95 in processing fees, which were assessed before the card was approved and therefore technically did not count towards the first year limit.

“Nice try,” said the Fed, which clarified earlier this year that all processing fees are indeed part of first year’s costs. First Premier moved on to Plan B: the $95 processing fee took on its current incarnation, a security deposit.

What’s more, the Credit CARD Act regulates how much issuers can levy in fees for the card’s first year: 25% of the initial credit limit. After Year One, however, all bets are off. Because 1st Premier charges the maximum allowed fee upfront, the bank is barred from levying further charges the first year. However, as soon as the CARD Act’s protection expires, a number of fees and charges crop up:

  • • A 3% foreign transaction and cash advance fee, which are industry standard but are notable because they only take effect the second year, after the fee cap expires
  • • A $3.95 one-time fee to access online banking, whereas most banks actually reward e-statements
  • • A $6.50 monthly fee, which doesn’t seem like much but adds up to $78 a year

1st Premier Bank annual fees

By default, the credit limit is set at $300 the first year. After that, customers have the option to increase their credit limit – for a fee of 25% of the increase. To increase the credit limit by $400, then, a customer must shell out $100. This is essentially punishment for good behavior: only those who spend responsibly will qualify for a higher credit limit increase, but they will pay the highest fees.

Credit limit increase fees, combined with cash advance, foreign transaction and monthly fees, mean that you can easily pay 70% more each year you hold the card. As time goes on, First Premier really starts making the money that it couldn’t make from you the first year, and therefore destroys the Credit CARD Act’s intent to protect vulnerable consumers.

Bad credit cards that aren’t so fee-ridden

Fortunately, there are cheaper and more straightforward alternatives to the Centennial and Aventium for those with less-than-stellar credit. The Orchard Bank MasterCard is intended to help establish or reestablish credit. HSBC, which owns Orchard Bank, gave the bank the goal of helping those with the least access to credit. While it does have some fees, it is far cheaper than First Premier’s cards and offers much lower interest rates. The interest rate falls between 14.9% and 19.9%, and the annual fee is $68 the first year and $59 after that. The Orchard Bank MasterCard is among the easiest unsecured credit cards to qualify for: FICO scores as low as 500-600 have made the cut. Among the few hard-and-fast qualifications are a $12,000 salary and a valid social security number.

If Orchard Bank credit cards are not an option, a secured credit card is open to almost anyone and can help to rehabilitate credit scores. Orchard Bank also offers a secured MasterCard with an APR of 7.9% and an annual fee of $35 that’s waived the first year. The Applied Bank Platinum Zero has no interest rate, but has a high $119 annual fee and requires a deposit of $500 or more. Many credit unions offer low APRs as well as low fees. And amongst larger banks, the Capital One Secured Card and the Citibank Secured Card come with a high APR of 22.9% and 18.24% respectively (as of this writing), but have unusually low annual fees of $29. Secured credit cards require an up-front deposit, usually equal to the credit limit. This deposit will not be used to pay down a balance; it’s collateral held against default, and is returned when the account is closed.

Watch out for this particular scam: Net First Platinum offers what looks like a credit card, but is actually a fee-laden gift card equivalent that can only be spent on the heavily marked up Horizon Outlet website. Another often-cited alternative is prepaid debit cards, but these come with a number of  similar fees and do not actually help to build credit. A regular checking account serves the same purpose, but without the ATM, reloading, and monthly fees.

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  • kennylc

    Well, as I am always saying. These bad-credit credit card issuers know what they are doing. If we want a card that badly, we have no choice but to deal with all of their upfront fees. Sadly, I opened this card because I fell in the bad credit category. I recently been approved for “real” credit cards with “grown-up” credit limits.

    It is kinda messed up that these credit cards have a full time department devoted to coming up with new fees.

  • Kat Martin

    DO NOT ACCEPT THIS CREDIT CARD….I didn’t even have “bad” credit when I was sent the pre-approval notice in the mail one year ago but boy was I stupid to accept the offer. I’m paying the 49.00 annual fee and A NEW (just started last month) 14.50 PER MONTH SERVICE FEE and 36% interest.
    This must be illegal? I thought they had laws against all the fee’s the credit card companies are charging? needless to say I’m closing my account and warning others DO NOT DO BUSINESS WITH THIS COMPANY it is not worth it. There are other companies out there that do not take advantage of people trying to rebuild or establish credit well at least not to this degree.SHAME ON YOU FIRST PREMIER MASTERCARD!!!!!!!!!!!!!!

    • http://billcollectorshateme.blogspot.com/ Bill Collectors Hate Me

      Yes, I got the same offer and threw it right in the trash. You will never pay that card off with 36% interest. I had a hard enough time at 21% interest when i had their card back in 2008.

    • Eva

      Had you made purchases with the card?

  • Eva

    I have a question for anybody who can give me accurate knowledgeable answer. My credit is at a stand still. My very first and only credit card went bad due to me falling on hard times. It was a capital one card with a $500 limit. I payed the card off about two years ago. With fees and everything i payed about $1500. Anywho i have recieved the first premier pre approval letter and i am tempted to open the account, however i am looking at these reviews and having second thoughts.I currently have 0 open accounts on my credit. My actual question is would it benefit me in ANY way if i opened this first premier account, payed the $75 or any other fees associated, and never use the card???

    • richard mccourt

      I will tell you what I did in Feb and raised my score 70 points in one month. I was on Credit Karma and ran across the open sky credit card. First I had applied for another one and was turned down. Well, open sky approved me and the annual fee only 29.00. My score went up 70 points I received the card within 10 days and it was already showing with all 3 bureaus. It is a secured one but I only put up 200 and it was well worth it. My score was 518 and soon as received the card it went up to 583… Just made my first pymt. Also don’t use over 30% of the amt of the credit limit each month…

    • richard mccourt

      STOP! DONT OPEN THAT ONE PLEASE READ ALL I HAVE HAD TO SAY ON HERE ABOUT THE OPENSKY CREDIT CARD I JUST GOT AND ONLY 29.00 YEAR FEE. I AM VERY HAPPY WITH MINE AND NO HARD PULL ON YOUR REPORT EITHER. ALSO REPORTS TO ALL 3 CREDIT BUREAUS SOON AS YOU SEND IN YOUR MIN PYMT WHICH I ONLY DID THE 200 MAY SEND IN MORE LATER BUT FOR NOW AND FACT THAT MY SCORE INCREASED FROM 518 TO 583 MAY TRY TO SEE IF BY INCREASING WILL HELP MY SCORE EVEN MORE…TRUST ME DONT ORDER THE OTHER ONE TRY THIS CARD. WISH YOU COULD LET ME KNOW THE OUTCOME BUT I AM TRYING TO LET EVERYONE ON HERE KNOW ABOUT THE CARD I ORDERED WITH MY SCORE.

    • Marlene

      The exact same thing happened to me. I applied and of course I had to pay a fee. I paid and received my card. The APR wasn’t so high as I thought it would be. So far I have about a year with the card and I have not had an issue. The only thing I don’t like about it is that you have to schedule your payment days before its due. I’ve been on time with all my payments and I have now received credit card offers from others. Hope this helps you.

  • Viviana Cornejo

    Don’t do it. I opened an account with them when I was going through a very hard financial time. I was grateful that I was able to, I needed it in that time, but, they do make money with you. The monthly charge, just for the fact of having it is $7 even if you have $0 balance.
    I closed the account, today, and the customer service guy tried to convinced me in many ways how it will affect my credit for closing this account. I kept telling him that I’ve made my mind, he very rudely said “okay” and hung up on me. Weird reaction for someone who’s supposed to be “customer service”.
    I really don’t recommend to open this credit card. Try to find something different, take some time when you’re not in a rush and do your research. Check with Consumer Reports, Finance Report pages, before making a decision. You may find boring reading so much information, but at the end, it’s very much worth. Take care.

    • richard mccourt

      What card are you talking about? You state don’t get that card but never mention what card…???

      • Guest

        Considering the title of this entry is “Please Don’t Get a First Premier Credit Card”, it should be pretty apparent..

        • Jeff Holland

          lol

  • richard mccourt

    FOR EVERYONE ON HERE TRYING TO GET A SECURED CARD AND DONT WANT TO BE RIPPED OFF GO TO OPENSKYCC.COM AND TRUST ME YOU WILL BE SATISFIED. I AM REPEATING MYSELF MANY TIMES ON HERE AS I AM VERY SATISIFED AND MORESO THAT MY SCORE WAS RAISED IMMED FROM 518 TO 583 SOON AS I GOT THE CARD. DONT THINK THEY TURN ANYONE DOWN AND YOU CAN FUND IT CARD BY PREPAID DEBIT CARD IF NEEDED AS WELL AS PAY YOUR MONTH PYMT SO NO WORRY ABOUT MAILING OR BEING LATE EITHER. FEE ONLY $29.00…..I KEEP SAYING I AM VERY SATISFIED AND WAS IN SAME BOAT AS EVERYONE ELSE ON HERE THANK GOODNESS I DID NOT RUN ACROSS THE ONE EVERYONE IS TALKING ABOUT 1ST PREMIER OR WHATEVER IT IS. ANYWAY, JUST MADE MY FIRST PYMT ON MINE A FEW DAYS AGO. PLEASE PASS THIS INFO ON TO OTHERS BEFORE THEY GET RIPPED OFF BY THEM AS THERE IS OTHER OPTIONS AND YES, I WAS FIRST TURNED DOWN BY CAPITAL ONE CREDIT CARD FOR THE SECURED CARD AND WAS REALLY WORRIED BUT LUCKILY RAN ACROSS THIS ONE. IT IS ISSUED BY CAPITAL BANK BUT NOT AFFILIATED WITH CAPITAL ONE AND THE NAME OF THE CARD IS OPENSKY BUT MUST PUT IN OPENSKYCC.COM TO APPLY. I BET I HANG ON TO THIS ONE AND DONT MAKE ANY MISTAKES FROM WHAT I AM READING ON HERE.. I THINK MY RATE SHOWS AS 17%

  • richard mccourt

    I HOPE THAT EVERYONE THAT READS MY COMMENT ABOUT THE OPENSK CREDIT CARD I GOT WILL POST ON HERE AND LET EVERYONE ELSE KNOW HOW IT WORKED OUT FOR THEM AS WELL. CAN SAVE ALOT OF PEOPLE ALOT OF HEADACHES AND MONEY I HAVE POSTED ABOUT 10 x TODAY ABOUT HOW SATISFIED I AM ABOUT MINE. YES SCORE OF ONLY 518 AND WAS IMMED RAISED TO 583 AFTER RECEIVING THE CARD.

  • Jim Smith

    I’m so glad I found this post! I have a “preapproved” offer from First Premier, and I just tore it up after reading this post. And I agree with the other poster, I have Open Sky. I had to pre-pay into a savings account, but that’s fine; it will help rebuild my credit. And I’ve been happy with them. It’s not as good as “real” credit card of course, but when you have bad credit and are trying to rebuild it, you have to start somewhere.