Bank Offers Credit Card with Astounding 59.9% APR
Interest rates on credit cards have been on the rise over the past several years with new credit cards now carrying an average 14.73% annual percentage rate. Some lenders, however, have taken their APRs to an all-time high. Take for instance First Premier Bank, which until recently, offered customers a MasterCard with a 59.9% APR.

March 17, 2011 /24-7PressRelease/ -- Interest rates on credit cards have been on the rise over the past several years with new credit cards now carrying an average 14.73% annual percentage rate. Some lenders, however, have taken their APRs to an all-time high.

Take for instance First Premier Bank, which until recently, offered customers a MasterCard with a 59.9% APR. The South Dakota-based bank pulled the card in February 2011, saying it had reached the maximum number of cards it was able to issue for the month. More than 300,000 people currently carry the MasterCard, which in addition to the high interest rate are also charged more than $100 in annual fees.

First Premier Bank's sister organization, First Premier Bankcard, services the company's credit card accounts. The bank targets consumers with "less than perfect credit" and offers them credit cards with low credit lines - usually around $300 - as a means to help them build their credit.

Unfortunately, these cards also carry impressively high interest rates. Prior to the 59.9% card, First Premier Bank offered a different card with an appalling 79.9% APR, but discontinued it after too many cardholders began defaulting on their monthly payments.

Some Banks Still Put the Customer First

First Premier Bank is not the only bank trying to recoup profit by offering cards with high interest rates. Many banks raised their interest rates and fee schedules in the past couple years in response to increasing payment delinquency and the 2009 CARD Act (Credit Card Accountability and Responsibility Act).

The CARD Act was passed by Congress to protect consumers from unfair bank practices, including excessive fees. The federal law made over-the-limit fees optional and prohibits banks from increasing interest rates on existing balances or within the first year after a new account has been opened.

Banks were not happy with the new law and argued that it would hurt their profitability and force them to recover some of their losses from customers by raising their interest rates and other fees, like ATM fees and monthly maintenance fees.

Not all banks, however, chose this route. Some banks have remained consumer friendly and still offer perks like free checking accounts. A recent report by CNN Money listed the following eight banks as the "least evil": Ally, ING Direct, USAA, Capital One, Alliant Credit Union, PNC, The Incredible Bank and Charles Schwab. E

Your Options for Dealing with Credit Card Debt

Credit card debt in the U.S .has escalated over the past decade with the average American household now carrying more than $14,000 in credit card debt. While some families can handle this debt load, and can continue to make their monthly payments, others are drowning in it and are uncertain of what, if any, options are available to help them.

Bankruptcy Protection Offers Consumers a Fresh Start

Bankruptcy protection is one of the most effective ways consumers can get help with insurmountable credit card debt and unsecured loans they cannot keep up with. Under bankruptcy, consumers can help get many of their debts wiped clean.

Bankruptcy also offers filers an immediate reprieve from their creditors. When a bankruptcy petition has been filed, the bankruptcy judge will issue an automatic stay against the debtor's creditors. Once this order is issued, creditors cannot contact or harass the debtor or take any other actions, like wage garnishment, against the debtor to try to recover the amounts owed. If a creditor already has filed a lawsuit against the debtor, the automatic stay also will stop those actions pending the outcome of the bankruptcy.

The Basics of Chapter 7 Bankruptcy

The most common type of consumer bankruptcy filed in the U.S. is a Chapter 7 liquidation bankruptcy. When a debtor files a Chapter 7, a bankruptcy trustee is assigned to the case and carries a duty to collect all non-exempt property owned by the debtor and sell it to repay the debtor's creditors.

Many people mistakenly believe that this means they will lose all of their personal property like clothes, furniture, and personal possessions in a Chapter 7. However, the majority of filers will be able to keep most if not all of their property.

Exempt Property

Under bankruptcy laws, debtors are allowed to protect certain "exempt" property from a potential trustee sale. Some examples of exempt property under Georgia law include:
- $10,000 in value of the principle place of residence (this amount is doubled to $20,000 for married couples filing bankruptcy jointly)
- $3500 equity in one vehicle
- $5000 in household goods
- $500 in jewelry
- All money held in 401k retirement accounts and pensions

Nondischargeable Debt

However, under federal bankruptcy law, there are some types of debt which are NOT dischargeable in bankruptcy. These generally include:
- Student loan debt
- Tax debt (unless more than three years old)
- Unpaid child support and other support orders
- Criminal restitution
- Judgments from a personal injury case

Once the bankruptcy judge discharges the debtor's remaining debts at the end of the bankruptcy, then the debtor can begin rebuilding his or her credit. While a bankruptcy technically will stay on an individual's credit report for up to seven years, many people find that their credit scores improve and they are able to secure new lines of credit not long after their bankruptcy case has been completed.

Post-2005 Bankruptcy Requirements

In 2005, bankruptcy laws were changed, including the qualifications for Chapter 7. Among those changes was the requirement that filers for Chapter 7 pass a means test, which determines whether they have enough disposable income to repay some of their debts. Those who are found to have sufficient monthly income to do this have the option of filing for a Chapter 13 bankruptcy instead. In a Chapter 13, debtors are required to repay a portion of their debts over a three to five year period.

While the 2005 changes were meant to limit the number of people filing for Chapter 7, the laws have not prohibited the vast majority of those seeking Chapter 7 protection from obtaining it. In 2010, 1.53 million Americans filed for bankruptcy with Chapter 7s accounting for 70% of the filings.

Contact a Bankruptcy Attorney

To learn more about your bankruptcy options, contact an experienced bankruptcy attorney today. A knowledgeable bankruptcy attorney can review your financial circumstances and help you determine if Chapter 7 would be a good option to help you get relief from overwhelming debt.

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