[Disclosure: Cards from our partners are reviewed below.]
Credit cards are a potential way forward for consumers looking to improve their poor credit. By opening a credit card, maintaining a healthy credit utilization rate and paying the bill on time, it’s possible to make marked improvements to your credit scores.
It can be difficult for people with bad credit to even qualify for credit cards in the first place, but there are options, including the First Premier Credit Card from First Premier Bank.
Who It’s For
Designed primarily for those who are struggling with credit, the First Premier Credit Card’s biggest advantage is the lower qualification standards. The approval process is quick and easy, and in some cases nearly instant. Customers who want to begin improving their credit but have trouble qualifying for other credit cards may have success with the First Premier Credit Card.
While this may be a good card if you’re limited on options, it’s important to note that it carries a long list of fees, which may not be worthwhile if you’re financially struggling in the first place.
Applying for the card comes with a $95 processing fee. Once you’re approved, you’re looking at an annual fee ranging from $75 to $125 for the first year (you’re looking at a $45 to $49 fee thereafter), depending on your credit limit. The credit limits range from $300 to $500.
The annual fee is charged to the card, so cardholders will hold $75 to $125 balance upon receiving the card. After the first year, First Premier Bank also charges a monthly servicing fee, which ranges from $6.25 to $10.40.
Cardholders can apply for a credit limit increase after 13 months, but would pay a fee equivalent to 25% of the increase. Additional fees associated with the card include a 3% foreign transaction fee, 5% (or $6) of the amount of a cash advance and a late fee of up to $38.
As for the annual percentage rate (APR), it’s set at a whopping 36% for purchases and cash advances, which is higher than most credit cards.
The First Premier credit card otherwise operates as a standard credit card. There are a few additional benefits, including credit score monitoring and credit protection, but these services cost extra. (You can pull your credit reports for free each year at AnnualCreditReport.com and see two of your credit scores for free on Credit.com.) Free services include text and email alerts, free electronic letters and a free digital wallet service.
The First Premier Credit Card’s primary advantage is its availability to consumers with poor credit. But this availability comes at a hefty cost. The card has a number of extremely high fees — including a processing fee, annual fee and monthly service fee in the second year — and only offers a maximum credit limit of $500.
With an interest rate of 36%, it’s likely a good idea for cardholders to pay their balance in full each month to avoid racking up extreme interest charges. Between fees and interest, it could be very easy to max out the card, which could end up damaging credit scores instead of improving them, which is likely the goal with getting this card in the first place. If possible, cardholders may wish to replace the card with a better alternative after the first year to avoid the extra fees that are added in the second year.
Alternative Options: Secured Credit Cards
If you are looking for a credit card to improve your poor credit, but don’t want to pay the hefty fees that come with the First Premier Credit Card, there is another option: secured credit cards. Secured cards help you build or improve your credit, but are opened with a security deposit. While consumers may balk at paying a security deposit, it could end up being more cost-effective than a credit card with high initial fees.
Here are two good options if you’re considering a secured credit card. (Remember, we’re providing an overview of terms and conditions here. Full details are available in the card agreement.)
Discover it® Secured
- No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
- Your Secured Credit Card requires a refundable security deposit up to the amount we can approve of at least $200 which will establish your credit line. You will need to provide your bank information when submitting your security deposit.
- We will automatically begin reviewing your account starting at 8 months to see if we can transition you to an unsecured line of credit.
- Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases - automatically.
- INTRO OFFER: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.
- Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
Card Details +
Card Details: Your credit limit matches the deposit you make — a minimum security deposit of $200 is required, with a maximum allowance of $2,500. Beyond that, you’ll earn rewards for all your spending: You’ll receive 2% cash back rewards at restaurants and gas stations, and 1% cash back on all other purchases. Discover matches the cash back you earn for the first year. The card comes with other standard features such as email and text alerts. This card is forgiving on late fees, as well — the first late payment fee is waived and late payments won’t affect interest rates. However, after that, there is a late payment fee of up to $37.
Annual Fee: $0
APR: 24.74% Variable on purchases & balance transfers
Card Details: While you won’t get rewards for any purchases you make on this card, it’s still a great option for building credit. This card comes with a security deposit — either $49, $99 or $200, depending on your creditworthiness — and once that’s paid, the card has an initial credit limit of $200. If you put down a larger deposit, you’ll increase your credit limit, with a cap at $3,000. Once you’ve made your first five monthly payments on time, you’ll be able to increase your credit limit without making an additional deposit.
Annual Fee: $0
APR: 24.99% (Variable)
At publishing time, the Discover it® Secured and Capital One Secured Mastercard cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.