TAKING A SUBPRIME CREDIT CARD
“In a lot of ways, the people who need the credit most are going to pay the highest fees and the highest rates to get it,” Lowery says. According to the 2012 Census, an estimated 48 million Americans (20 percent of adults) have credit scores below 600, leading them to subprime credit cards with annual fees of as much as 25 percent of a card’s credit limit and APRs near or exceeding 30 percent. Those cards include application fees, processing fees, maintenance fees, and authorized user fees adding up to $150 a year, or $2.5 billion for all subprime cardholders. Those cardholders get cardholder agreements that are 70 percent longer, on average, than the typical and written at a level suitable for someone with two years of college — but more than half of mailings from subprime card issuers went to households with no education beyond high school.