79.9 percent initerest | The Omnipotent Poobah Speaks!

First Premier Bank is making the leap into legalized loan sharking with a new credit card offering a $300 credit limit for $256 in first year fees, a $29 late fee, and a $75 annual fee thereafter. Oh, and they want to charge 79.9% interest on the outstanding balance just to sweeten the pot.

First Premier – who’s already paid a $4.5 million out of court settlement for preying on bad credit borrowers – said they designed the program for high risk, sub-prime borrowers and needed to “price [their] product based on the risk associated with this market.” Since these types of cards and loans – albeit at much lower rates – are a big part of our financial mess, it’s nice to see they’re moving to a risk-based model.

But, isn’t this risk management with extreme prejudice?

Potentially charging much more than $300 for a $300 loan is a counter-intuitive way to encourage borrowers to pay the money back. It makes it makes it dead-solid certain they’ll default. First Premier might just as well have sent mailers to potential customers telling them to fork over the money now and avoid the inconvenience getting your $300 bucks now and having their knee caps meet a baseball bat up close and personal-like later.

Of course, First Premier is only making this tremendous deal available out of their concern about their least credit-worthy customers. “Even when the cost of credit is astronomical, for people in true emergencies, it’s much better than not having access to credit,” said Odysseas Papadimitriou, CEO of credit card search firm card-hub.com.

So, correct me if I’m wrong here Ody. If these borrowers need a quick $300 for an “emergency”, they probably wouldn’t have $256 to set up the account. Moreover, the prospect they’ll have an additional $29 per late payment, $75 for next year, and 79.9% to cover the outstanding balance just defers an “emergency” today into a big bigger “emergency” tomorrow.

Ody, you’re a real CPA (Certified Public Asshat).

Passing out huge executive bonuses is bad. Using TARP money to lobby for a loosening of regulations is loathsome. However, it takes some big stones – Gibraltar-sized ones – to be this greedy and arrogant.

With any luck, those huge stones will come together and roll swiftly down the mountain, directly onto your crapulent asses.

And, we’ll only charge you 79.9% on the balance of all your assets to dig you out.