When you have bad credit, it’s easy to hear the words “credit card” like you would the name of an exclusive country club. It sounds nice, but it’s probably not available to you.
Fortunately, not all lenders or financial institutions feel this way. Many of them understand the needs of people with bad credit or no credit. They know you need a shovel to dig yourself out of a hole, and they are happy to provide that shovel.
One of these shovels is the Mastercard from First PREMIER Bank. This card is a rarity for people with poor credit because it’s an unsecured credit card.
But what is an unsecured credit card, and what other details of the First PREMIER Bank Mastercard make it attractive or worthy of skepticism? Read on for the answers in our full review of this credit card.
Credit Card 101: Secured Credit Cards
Let’s start with some basic definitions of terms. For people with bad credit, credit card options are usually limited to secured cards. You can usually tell these cards because they have “secured” somewhere in their names.
Secured credit cards present themselves as alternatives to “preferred” or “travel” or “miles” cards, all of which take their names from the types of rewards they offer or the fact that they are for customers who already have good credit.
Here’s how a secured credit card works. When you open the credit card account, you pay the issuer a deposit. This deposit is usually equal to your line of credit, so if your deposit is $200, your credit limit on the card is $200 as well.
This deposit secures your line of credit, hence the name “secured credit card.” That means if you’re late or delinquent on payments, the card issuer can deduct what you owe from your deposit. But if you pay on time, you can eventually get that deposit back and even increase your credit limit.
At least one problem with secured credit cards can arise for people with bad credit. They often don’t have the funds to pay a security deposit up front on a credit card. Does that stop them from being able to improve their credit by using a credit card? No!
Credit Card 101: Unsecured Credit Cards
Enter the unsecured credit card, an efficient if not necessarily elegant solution to this problem. These cards forego the security deposit requirement. If you qualify for an unsecured credit card, you can get access to your line of credit immediately.
But unsecured credit cards come with qualifications. These usually take the form of hefty fees the card issuer charges for the freedom of using a credit card without a security deposit. These fees can include high annual percentage rates (APR), various yearly and monthly usage fees, large late payment and return item fees, and high percentage charges for cash advances and foreign transactions.
As you can see, it’s important to make your choice wisely when faced with the option of either a secured credit card or an unsecured credit card.
Where the Card Comes From: The Backstory of First PREMIER Bank
One factor that can help you make your choice of which credit card to use is knowing more about the financial institution issuing the card. Let’s dive into the details of First PREMIER Bank. Who are they, and can you trust them with the future of your credit?
First PREMIER Bank is based in Sioux Falls, South Dakota, and the company does not just issue credit cards. First PREMIER also offers financial services like wealth and asset management, business treasury services, trust administration, investing, and personal checking accounts. The company prides itself on being a full-service community bank with services on all levels, local, regional, and national.
So where does the specific unsecured credit card we’re talking about come in?
The First PREMIER Bank Mastercard is the result of a partnership with the bank’s separate but related sister organization, PREMIER Bankcard. Together, the two institutions boast their status as the 13th largest issuer of Mastercard credit cards in the United States.
Between these two organizations, there are nearly 2,300 employees in South Dakota.
All this history and status as such a large credit card issuer should give you some peace of mind when trying to decide whether or not to apply for the First PREMIER Bank Mastercard. These things may not make the card ultimately right for you, but they aren’t negatives.
Here are a couple of other facts that speak to the history and trustworthiness of First PREMIER Bank.
- First PREMIER Bank operates with zero debt.
- DepositAccounts.com recognized First PREMIER Bank as one of the healthiest banks in the United States in 2015.
- First PREMIER Bank serves as the bank for both the State of South Dakota and the Women, Infants, and Children (WIC) program.
- The American Banker and Best Companies Group ranked First PREMIER Bank among the “Best Banks to Work For” three years in a row: 2015, 2016, and 2017.
- The holding company that operates above First PREMIER Bank and PREMIER Bankcard is called United National Corporation. The American Association Banking Journal has consistently ranked United National Corporation as one of the top-performing S-corp banks with assets between $100 million and $3 billion.
Terms and Conditions Do Apply
Now that you know the company issuing the First PREMIER Bank Mastercard, it’s time to get to know the ins and outs of the credit card itself.
Let’s start with the fees and interest rate that apply to all versions of this credit card. The APR on the First PREMIER Bank Mastercard is 36%. That APR applies both to purchases and cash advances.
The card also requires a “Program Fee” in the amount of $95. This is a one-time fee involved in the set-up of the card. It is not the annual nor the monthly fee.
For cash advances, First PREMIER Bank charges the greater amount of $6 or 5% of the amount of each cash advance. Foreign currency transactions incur a 3% fee on the amount of each transaction in U.S. dollars.
Then there are the penalty fees. If you pay your credit card bill late, you may be on the hook for a fee of up to $38. The charge for return items is up to $35.
Now let’s talk about the credit limit. You have three options in this department. You can choose a $300 line of credit, a $400 line of credit, or a $500 line of credit. The fees associated with your First PREMIER Bank Mastercard will depend on which of these options you select.
For cards with a credit limit of $300, the annual fee associated with the card is $75 for the first year and $45 each year after that. Separate from the annual fee is a monthly fee in the amount of $75 annually, which comes out to $6.25 per month. As part of the card’s introductory offer, there is no monthly fee for the first year. Because of the annual fee charge, the initial credit available on a First PREMIER Bank Mastercard with a $300 credit limit will be $225.
For cards with a credit limit of $400, the annual fee associated with the card is $100 for the first year and $45 each year after that. The monthly fee on this card is also $75 annually or $6.25 per month. Again, there is no monthly fee for the first year. Because of the annual fee charge, the initial credit available on a First PREMIER Bank Mastercard with a $400 credit limit will be $300.
For cards with a credit limit of $500, the annual fee associated with the card is $125 for the first year and $49 each year after that. The monthly fee on this card is $124.80 annually, which equals $10.40 per month. Still, there is no monthly fee for the first year. Because of the annual fee charge, the initial credit available on a First PREMIER Bank Mastercard with a $500 credit limit will be $375.
Here are a few other fees associated with the First PREMIER Bank Mastercard that fly under the radar a little.
- Additional Card Fee: $29 annually for each additional card. This is charged at the beginning of the set-up process. Thus, $300 credit limit cards taking advantage of the additional card option will start with $196 available credit. $400 credit limit cards will start with $271 available credit, and $500 credit limit cards will start with $346 available credit.
- Credit Limit Increase Fee: 25% of the amount of the increase. Each time you are eligible and approved for an unsecured credit limit increase, First PREMIER will charge 25% of the additional credit. If your limit increases by $100, that means the company will charge $25, leaving you with $75 additional credit to start.
- Copying Fee: $3 for each copy of any credit card statement, sales draft, or any other document.
- Express Delivery Fee: $35 for First PREMIER to provide express delivery on cards that are lost, stolen, or need replacing.
- Wire Transfer Fee: $5 per transaction.
This may seem not just exhaustive but exhausting. But we promised an ultimate review of this credit card, and that’s what we’re giving you. And with an unsecured credit card like this, it’s important to take every little fee and interest rate into account when making your decision whether to apply or not.
If you have poor credit, you may have made unwise decisions regarding credit cards in the past. We want that to stop. Informing yourself about all aspects of a prospective new credit card in the research phase is a great way to turn over a new leaf in your credit history.
Why You Might Need a First PREMIER Bank Mastercard
“Need” may be a strong word, but we know people use credit cards to help them out of tight spots financially. You may be in that boat. If so, the First PREMIER Bank Mastercard might be right for you.
Keep in mind, with an unsecured card like this, the fees and interest pile up quickly. If you’re using it to help you out of a jam, make sure you have additional income arriving soon. If not, you may end up in a deeper hole after using the card than before you started.
Why You Might Want a First PREMIER Bank Mastercard
“Want” is usually a more appropriate word when it comes to unsecured credit cards. The First PREMIER Bank Mastercard is no different.
We envision people wanting this card for the flexibility it offers. Since you don’t have to pay a security deposit, you can start using the card immediately after being approved while knowing you’re not already in double the debt.
The people who are likely to get the most benefit out of using the First PREMIER Bank Mastercard are financially liquid and have steady incomes. They may have poor credit, but they have the ability to pay off balances quickly and on time. This card can help these people work their ways toward better credit.
Why You Might Steer Clear of a First PREMIER Bank Mastercard
The fees and interest rates associated with this credit card are all the red flags you may need to avoid applying. If those don’t deter you, this may be the unsecured credit card for you.
There is one more word of caution to bear in mind. It has to do with those credit limit increases we mentioned earlier.
First PREMIER makes decisions to increase credit limits based on the timeliness of payments and your performance with your credit accounts. But given you qualify, the company makes customers eligible for credit limit increases once your account has been open for 13 months. That means the company may automatically increase your credit limit and charge the related fees if you don’t decline the increase.
To decline your credit limit increase, you have to notify First PREMIER within 30 days after the date on the billing statement that includes the increase fee. If you do this, First PREMIER will reverse the increase, but it can be an unnecessary hassle if you never wanted the increase in the first place.
Not the Only Option
With the details and history in our ultimate review, you’re armed to go into your First PREMIER Bank Mastercard application with your eyes open to the benefits and drawbacks of this unsecured credit card.
But you should know that there are ways to improve bad credit that don’t involve credit cards. Taking out a loan is one of these ways. If that interests you, check out our sections on general loans for bad credit and specifically personal loans for bad credit.