Author Topic: Bad Credit? Want to rebuild? Ve "Salute" you...  (Read 5191 times)

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Rottweiler

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Bad Credit? Want to rebuild? Ve "Salute" you...
« on: May 21, 2008 06:28:17 AM »
although which end is doing the "Salute" could well be debated!

This card--intended as a "credit builder"--may well have done the impossible:  Won the race to the bottom of "desperation" moves for those with poor credit (or none at all).  This card, the "Salute" card, advertises itself as a way to help those without good credit build it.

Not a useless idea....but...well, let's look at the key "Terms and Conditions" for this little "gem":

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If you are approved for a card, we will (i) open an account for you on our books, (ii) post the fees described in “Available Credit Limitations” section below in the Summary of Credit Terms that apply to your account, (iii) send you your card and Bank Credit Card Agreement and (iv) send you your first monthly statement after we mail you your card. Your initial minimum payment of $20 must be received, cleared and posted on your credit card account before you can activate your card and use your credit card account. When we process your initial minimum payment of $20, if our attempt fails, you understand that we have the right to close your credit card account.

These people want the first month's payment in advance.  On a credit card which the account holder cannot even activate or use until the payment is received, cleared and posted!  This forces the account holder to pay on an account they cannot even use yet.

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Credit Eligibility
We offer two Salute™ Visa Gold Credit Card accounts: one with a credit line of $300 (“$300 Card”) and an alternative account with a credit line of $70 (“$70 Card”). The account for which you may qualify, depends on whether you meet the credit eligibility requirements that we previously established for the account. We will consider you first for the $300 Card. If you do not qualify for the $300 Card, then we will consider you for the $70 Card.

Oh, wonderful.  If one does not qualify for the card with a grand total credit line of $300, one MAY be considered for a card with a credit line that would not even fill the gas tank these days--$70.  The initial $20 payment is either the first payment (for the $300 line) or an "account opening fee" (for the $70 line).

And just see the fees!!  :o  :

On the $300 card:

Annual Fee of $150
The initial payment in advance $20

The total available credit line at activation is $170.

Annual fee of $72/$6 per month.

For the $70 (why bother?) card:

Well, it's a "wash":  They charge the $20 account opening fee which must be paid before they will let the account holder access that "generous" credit line.

One which they WILL increase every month for the first year on the $70 card and after six months , as long as one uses the card and pays on time; the $300 card requires that "you; (i) made your first four minimum monthly payments on time, (ii) made at least one purchase or cash advance, and  (iii) you have kept your account open, current and not gone overlimit."

Fees, fees...and more fees:  We are not through yet.  After all, what is a "good" credit card these days without a few more of them.  Such as:

An account maintenance fee of $228/year ($19/mo) on the $70 limit card once you have made that first purchase; the annual fee stays at $72 for the $300 line.

Interest rates?

For the $300 card:


APR for purchases:  As of March 1, 2008: 19.50%

Other APRs
   
As of March 1, 2008:
Cash Advance APR: 25.50%
Delinquency APR for Purchases: 25.50%
Delinquency APR for Cash Advances: 31.50%

For the $70 card:

APR for purchases:  As of March 1, 2008: 14.99%

As of March 1, 2008:
Cash Advance APR: 20.99%
Delinquency APR for Purchases: 20.99%
Delinquency APR for Cash Advances: 26.99%

And how is the APR calculated? For the $300 card:

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The APR for Purchases is determined by adding 11.75% to the Prime Rate (defined below), but in no event will be less than 19.50%. The APR for Cash Advances is determined by adding 17.75% to the Prime Rate, but in no event will be less than 25.50%. The Delinquency APR for Purchases is determined by adding 17.75% to the Prime Rate, but in no event will be less than 25.50%. The Delinquency APR for Cash Advances is determined by adding 23.75% to the Prime Rate, but in no event will be less than 31.50%. The Prime Rate used to determine the applicable APR is the highest "Prime Rate" published in the "Money Rates" section of The Wall Street Journal on the 25th day (or if not published on the 25th, then on the date of the next publication following the 25th) of any of the three calendar months immediately preceding the month in which the Billing Cycle begins.

And by the time one has used the credit line to pay the accountant for the consult to explain THAT paragraph... ::)

The same rules hold for the $70 card, but the APRs are:  Purchases, prime +7.24% but no less than 14.99%; Cash advances, prime + 13.24% but no less than 20.99%; delinquency APR for cash advances prime + 19.24% but no less than 26.99%

25 day grace period for new purchases IF the balance was PIF on time.

5% fee on a cash advance, minimum $5.00

Late fees:  For the $300 line, late fee and over-limit fees are $35.00 each.

For the $70 line?  Well...here they are:

Late Payment Fee:
   For balances of $30.01 to $100: $5
   For balances of $100.01 to $200: $15
   For balances of $200.01 to $300: $25
   For balances greater than $300: $35
Overlimit Fee: $25

In other words, gouge the ones with the worst credit rating the most.

This beauty also includes a compulsory binding arbitration clause and Non-Sufficient Funds Fee of $35 ($300 Card) or $25 ($70 Card); International Transaction Fee of 1% of the transaction amount; a "choice of law" provision using Federal law and/or Florida law.

However, things are not ALL bad:

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To ensure that you receive quality service, you agree that we may randomly select phone calls for monitoring and/or recording.

So should it get to litigation anyway, record away.

But then, again...

It seems that they are more than a little concerned about the TCPA...or "CAN-SPAM":

Quote
Electronic Communications: You agree that we may communicate with you...by electronic means using the electronic mail address provided to us in your application and/or by automatic dialers which may play recorded messages, and that no such communication will be deemed to be unsolicited.

Or, in even plainer English:  "You agree that we may harrass you and spam you and simply be a nuisance..."

Well, you all may be asking, who is the issuer of this "lovely" item which, in all it's nuance, may well have managed to make First Premier Bank look positively good (and helped the reputation--just a bit--of your local payday loan place)?

Here they are:

Quote
Card Issuance and Servicing

Salute™ Visa Gold Credit Cards are issued by Urban Trust Bank, FSB and serviced primarily by CompuCredit Corporation on behalf of Urban Trust Bank, FSB.

Why am I not surprised?

<edited:  Removed inapplicable case; this outfit was sued and the "Perry v. First National Bank" case was cited as precedent.>
 
« Last Edit: May 21, 2008 06:46:41 AM by Rottweiler »
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debtonator

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Re: Bad Credit? Want to rebuild? Ve "Salute" you...
« Reply #1 on: May 21, 2008 11:37:45 AM »
Quote
by Rotty
although which end is doing the "Salute" could well be debated!

No debating here...salute this...(|)

Visa it's everywhere you are and don't want to be.

Cheers
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Kitten

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Re: Bad Credit? Want to rebuild? Ve "Salute" you...
« Reply #2 on: May 21, 2008 02:51:53 PM »
These 'upfront fee' cards are just secured cards in which the issuer gets to keep the security deposit for themselves. I'd rather get a secured card from Bank of America or my local credit union.

Rottweiler

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Re: Bad Credit? Want to rebuild? Ve "Salute" you...
« Reply #3 on: May 22, 2008 01:11:59 AM »
BTW:  This is the homepage for the "Salute" card website should you want to check it out:  https://www.mysalutecard.com/en/  .

The "Terms and Conditions" can only be accessed by bringing up a pop-up window by clicking a link on the "Application" page or by using this URL:  https://www.mysalutecard.com/apply/saluteterms.html

I guess they have good reason to NOT be up-front about them...  :)

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Flyingifr

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Re: Bad Credit? Want to rebuild? Ve "Salute" you...
« Reply #4 on: May 22, 2008 01:29:24 AM »
Actually, the devil is in the fine print.

The $70 card is really a $51 card since there is a monthly fee of $19 for the privilege of carrying it, so you pay $228 a year in monthly fees for a $51 credit line.

The $300 card also has a monthly fee - it's $6, so the combined Annual Fee plus the Monthly Fee is more than half the credit line ($186), so you only have an effective credit line of $114.

This card makes a Payday Loan look like a bargain.

Also - just LOVE these two excerpts from the Terms of offer:

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You understand and agree that you cannot alter the terms of our offer.
paragraph 1

Quote
Changes in Terms: Your account represents a continuing offer to extend further credit to you that may be withdrawn at any time. You agree that the terms of your account, including any of the terms disclosed in this offer, may, at any time, be changed (including the addition or deletion of terms) in accordance with your Agreement and applicable law. Such changes may be based, in whole or in part, upon factors including, but not limited to, anti-fraud policies and procedures, your record of making timely payments and staying within the established credit line on your account with us, your credit score and information contained in your credit report and your proper maintenance of the checking account used to make your automatic payments, and/or changes in this or other card programs or bank policy.
paragraph 5
« Last Edit: May 22, 2008 01:39:47 AM by Flyingifr »
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

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Rottweiler

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Re: Bad Credit? Want to rebuild? Ve "Salute" you...
« Reply #5 on: May 22, 2008 01:33:36 AM »
Good analysis, Flying.  I missed that point entirely (Credit line - Costs and fees of carrying the card=Actual available credit line).  Indeed, the "Salute" card does make a payday loan look like a bargain in comparison.

What else could we expect from CompuCredit?   :P
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dls7406

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Re: Bad Credit? Want to rebuild? Ve "Salute" you...
« Reply #6 on: May 22, 2008 02:52:26 AM »
Looking at this from an investment stand point, and analising the yield makes one want to be on the other end of the equation. Minus of course the ethics issue. lets examine this from an investors perspective, and adjust all of the variables to their worst case scenario position. (Not considering default)

As an investor for the $70 card, you pony up $51 maximum for the customers purchase. In return you receive automated payment from the victim's customers checking account for the $19 service fee, plus a $5 minimum payment on the balance. So your initial invetment of $51 returns $24 monthly.

I won't even bother running this through my financial calculator to add in interest, but we know that with interest the minimum payment will gaurantee at least 12 payments at the $24 amount. 12 X $24 is $480. $480 minus the initial investment of $51 is a $429 profit. I will gaurantee that is over a %2000 annual yield when you run the numbers. Not too shabby. This assumes similar reinvestment of payments received.

Rottweiler

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Re: Bad Credit? Want to rebuild? Ve "Salute" you...
« Reply #7 on: May 22, 2008 03:11:54 AM »
Quote
You understand and agree that you cannot alter the terms of our offer.

Translation:  "YOU can't do a thing about the terms and conditions, but WE CAN.  Whenever we feel like it."
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Rottweiler

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Re: Bad Credit? Want to rebuild? Ve "Salute" you...
« Reply #8 on: May 22, 2008 03:26:00 AM »
Another thing to keep in mind is that CompuCredit is known for securitizing their credit card offerings.  So, not only are they making a mint off the victims account holders, they are making money off the securitization trusts.  And passing off the risks involved, at least in part, to the investors.

How wonderful!   >:(  Make the money.  Make others take the "fall".
“This is a court of law, young man, not a court of justice."
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