This sounds worse than payday loans...
Big Fees for Little Credit
Some companies issue cards with the sole intent of collecting fees from gullible customers, not offering them credit.
A typical example the law center offered was this: a card issued with a credit limit of $250. After a $95 program fee, a $29 setup fee, a $6 monthly “participation” fee and a $48 annual fee, the consumer winds up with “an instant debt of $178 and buying power of only $72.”
Included in the report is the tale of a sailor on leave who charged $85 to her new card. Because of all the fees, that put her over her $250 limit, which led to penalties and a balance of more than $300.
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