Complaint Review: First Premier Bank - Sioux Falls South Dakota

Introduction: why I signed up with First Premier Bank

I had trouble getting financing for a car. I do not have bad credit - in fact my credit is pretty good. It's not excellent because there are two errors on my credit report (three errors actually but two are one incident) and I have the documentation to prove my report is in error. I just hadn't gotten around to writing the credit bureaus about it and didn't consider it important since I have letters from both my attorney and my former creditors. The matters are paid in full/paid as agreed.

However, despite that the reason I couldn't get financing is I don't use credit unless I need it. I closed all my credit cards many years ago and I HATE debt. So, I made the decision to close my cards and not carry any debt. The only "debt" I had was month-to-month utility bills - not anything anyone would consider debt, and a cellphone contract, which is an outstanding liability from an accounting perspective, since I am liable for two years' cellphone services.

Now, I've financed a car before, and the car wasn't cheap. I never missed a payment, and never, ever made my payment late.

When I went to get financing for a new car, I ran into a problem: my credit is good, but it is now a "limited credit history." In other words, while I pay my bills and am not a deadbeat, I do not utilize credit. I'm considered a bad risk even though I pay my bills, but deadbeats can get financing without any problem.

ANYWAY, I read up on how credit works now since the credit crunch started, and found that they like to see credit cards with an average 35% utilization, that is, your credit card balances being used regularly and balances averaging 35% of your average credit.

Application: Time to be a sucker!

So, it was time to get a credit card. I went to best buy to buy something frivilous and pay it off over a few months, and was denied.

So, I went searching for unsecured "no credit" credit cards, and found First Premier. I signed up, accepting that their $179.00 worth of fees (application fee, annual fee, sucker fee, etc.) was the cost of getting back into the game. I was accepted (of course) and would receive my card in 7-10 business days. Fine.

A few days letter I received a letter from First Premier informing me I will be receiving a card and my account has a $250 credit limit, but if I pay my first minimum payment "today" (presumably the first day I am possibly able to - the day I receive my card so I can get my account number and enroll, etc) then I would receive a credit limit increase.

Four days later I received my card. Much to my surprise it was already activated (Uh, isn't this dangerous, First Premier?). I promptly made a payment: I paid off all but $4.00, electronic payment. I accepted their "internet payment convenience fee" and expected the check to clear immediately, just as Federal Law now requires (bank-to-bank checks between U.S. banks now clear instantly).

It is now 6 days later and while the funds have been withdrawn from my checking account, and it shows as paid in my account summary, my available credit is not $246, but only $60.00. Why $60.00 and not $71.00? My Paperless billing and "internet payment convenience fee" were not added to my check as I expected, but added to my balance. So, I now have a balance of $14.95, not the $4.00 it should be. That's right! They charge those fees to the account so they can rack up interest on it.

In inquired as to why the credit limit hasn't cleared to match my payment, and the response is (paraphrased) "the contract states available credit may not be released for up to 20 days following a payment." Right, it says "may" not "will." Bank of America is not a fly-by-night operation. The payment cleared immediately.

Mail Fraud: They lied about the credit line increase

They lied about the credit line increase. I wrote them inquiring about the credit line increase they offered: I made the payment promptly and was wondering whether I had to request it or if it was automatic. I received an response saying that the response to my credit limit increase request was going to be sent by mail. First off, I didn't ask them to raise it: I asked IF the raise in limit was automatic or if it had to be requested. Secondly, they are committing mail fraud since their letter stated I would receive an increase if I paid "today" (meaning the day the card arrives, which is the first day I can possibly pay). I accepted their offer by paying promptly and they are refusing to deliver.

For me, a $250 credit limit is unusable. I deal with big-ticket items with my corporate AmEx, and heck, I can't even rent a car on my personal credit card.

Bottom line: If you are thinking of using First Premier to rebuild your credit, you'd better rethink your position. If I were more patient, I could have gone to a local credit union or bank and received a limit ten times higher. I was so upset about getting rejected while having good credit that I was impatient so I went with one of the "no credit" companies advertising on various credit-related web sites.

They extended me an offer of a credit limit increase upon prompt payment of my first statement. I accepted that payment and paid well more than the minimum. they are now refusing to deliver. That is a textbook case of mail fraud.

Support your local credit union. I will be sticking with First Premier for six months to a year because closing a credit card in good standing is one of the worst things you can do to your credit score (it's a bigger ding to your score than missing a payment) but believe me I will break that rule and close this card as soon as I have had it for a year and get a card with a $2,500 or larger limit.

First Premier charges a lot of fees, commits mail fraud, and grants cards usable for only groceries and fuel. What a waste.

The moral of the story is to never close all your credit cards. Always keep at least one open and use it once in a while, because even if you have good credit, banks will turn you down for auto loans and mortgages if you don't use your credit regularly.

Kimberly

Rockland, Massachusetts

U.S.A.

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