First Premier Bank, headquartered in Sioux Falls,

South Dakota South Dakota (; Sioux: , ) is a U.S. state in the North Central region of the United States. It is also part of the Great Plains. South Dakota is named after the Lakota and Dakota Sioux Native American tribes, who comprise a large po ...

, is an issuer of MasterCard brand

credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the ...

s in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

. The bank is known for specializing in a wide range of

subprime In finance, subprime lending (also referred to as near-prime, subpar, non-prime, and second-chance lending) is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. Historically, subp ...

credit cards that are marketed to individuals with low

credit score A credit score is a numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual. A credit score is primarily based on a credit report, information typically sourced from credit b ...

s.AP Story/NYTimes:

History

The bank was founded in 1986 and is owned and controlled by T. Denny Sanford. In 2020, Sanford was being investigated for possession of child pornography. Investigators obtained a search warrant prior to referring the case to the

United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...

. The criminal investigation was ongoing as of January 2022 at both the state and federal levels. The typical First Premier Bank MasterCard user uses the card for about 18 months before moving to another card with better terms; Sanford described the company as offering a "lifeline" for those with poor credit. In 2014, it was announced that First Premier Bank sued cardhub.com for allowing customers to view rates and terms and also letting users review the card. The lawsuit was dropped months later.

Legal actions against

In 2007, the bank settled a case with the New York Attorney General who claimed the bank used deceptive practices to market its credit cards. The bank paid $4.5 million as part of the deal.

Criticisms

As of December 2010, First Premier Bank was reportedly offering a credit card with a 79.9% interest rate and a $300 limit. This was cited by Senator

Bernie Sanders Bernard Sanders (born September8, 1941) is an American politician who has served as the junior United States senator from Vermont since 2007. He was the U.S. representative for the state's at-large congressional district from 1991 to 20 ...

as an example of what he called "extortion and loan sharking". First Premier Bank's CEO, Dana J. Dykhouse, was referenced in a 2014 piece in the Argus Leader as belonging to a group of would-be local benefactors who the author wrote, "should quit gouging poor people who can't make it from paycheck to paycheck, or don't qualify for regular credit cards. ... Loan sharks who charge an obscene profit just because they can don't make good community leaders."

Reviews

In April 2018, John Kiernan of WalletHub, a personal finance website, ranked the First Premier Bank MasterCard poorly (1 stars out of 5). He wrote that the card had excessive fees, low credit limit and a high

annual percentage rate The term annual percentage rate of charge (APR), corresponding sometimes to a nominal APR and sometimes to an effective APR (EAPR), is the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mo ...

that made it a bad choice for most users.First PREMIER® Bank Mastercard Credit Card
by John Kiernan, Credit Card Editor, WalletHub website, June 8th, 2022

References

External links