Aspire to go Broke: a Visa credit card at 41.5% APR!
Written: Sep 28 '00 (Updated Oct 07 '00)
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Product Rating:
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Pros: They will probably approve you, even if you have some bad credit or no credit.
Cons: Is it really worth a 41.50% APR?
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| netKat's Full Review: Aspire Visa Gold |
For people who are trying hard to establish credit but may have stumbled along the way, Aspire is touted as a great alternative. This credit issuer is willing to consider the higher risk customers that the major credit card companies overlook, without imposing an application fee or an annual fee. This is a regular credit card product, not a secured card, and is issued by Columbus Bank and Trust Company through a corporation called CompuCredit.
CompuCredit stresses their desire to give everyone who wants credit an opportunity to attain it without an annual fee, application fee, or the necessity of a security deposit. The company was established in 1996, and claims to have had over a million cardholders. Of course, many of these cardholders have probably since wised up and ditched the Aspire card.
Are they helping consumers? Maybe, but mostly they're just helping themselves.
- Let's Take a Look at the Terms -
• No Annual Fee
• No Application Fee
• 25 Day Grace Period
If you pay your balance in full and on time each month, you will not have to pay the accrued finance charges on your balance.
Sounds pretty good so far, right? But what's the APR?
• 28.25% APR, or, in the case of delinquency 34.25%
There is no promotional rate available on this card.
But wait, it gets worse. If you are not approved for the Gold Aspire card, they will automatically consider you for the Standard or Diamond Aspire card at a rate of...
• 30.25% APR, or, in the case of delinquency 35.50% or 41.50%
WHAT!?! Call the police! 41.50%!?!
Let's talk about usury. Surely this can't be legal! But it is, because it's in the cardholder agreement, and when you sign the application, you agree to the terms.
By the way, these rates are Variable. They will be adjusted every month based on the highest Prime Rate as published in the Wall Street Journal. Is there a limit as to how high the rate can rise? No! But Aspire has conveniently placed a limit as to how low the rate can adjust in the terms.
- Why is the Interest Rate so High on Aspire? -
Credit cards are just like signature loans. A bank is lending you money based on your promise to pay it back. There is no collateral involved. You don't have to risk anything but your credit. So, the interest rates are based on risk. A card like Aspire is aimed at a high-risk credit group and therefore will carry a higher rate of interest to cover the cost of the bad debt that they expect from a higher than normal percentage of accounts. Still... 41.50%?
- Does this Aspire Card have any Benefits? -
Yes, as with most Visa Gold Cards, there is an assortment of benefits which you can take advantage of, even if you do not revolve a balance.
• Travel Accident Insurance
The Aspire Visa Gold offers $250,000 of insurance when you charge the full price of your ticket on the card. This is a normal benefit to be found on Visa Gold cards and is great for travelers.
• Extended Warranty Protection
Another benefit to be found on Gold Visas, this will double the manufacturers US warranty on most items you purchase using the card for up to an additional year. Be sure to save both the store receipt and your credit card receipt, because a lot of forms need to be filled out to take advantage of this benefit should you need it.
• Supplemental Auto Rental Insurance
No need to take that extra insurance when you rent a car. Just charge the full rental on your Gold Visa card and you are covered. Limitations apply, so be sure to check with the company when you are planning to rent a car to make sure you will be covered for the full value of the car.
- Are there any Other Fees? -
Yes, similar to other credit cards there is a fee if you make a late payment or if you go over your credit limit. Both of these fees are $35, which is on the high side. Remember, interest and fees can put you over your credit line causing you to get hit with the overlimit fee too. With this kind of pricing structure, you have great odds of paying more in fees and interest than the total of your original purchase!
Additionally, if you take a cash advance on your credit card there is a 3% transaction fee with a minimum of $10 and no maximum. Keep in mind, you will also be paying interest on a cash advance from the date of the advance. There is no grace period on cash.
- A Warning about the Grace Period -
On a card like this, with an incredibly high rate of interest, the last thing you want to do is to revolve a balance. Keep in mind that the minute you have even one penny revolving, you have lost your grace period for every subsequent purchase you make until you have that card paid off in full with a zero balance. Beware.
- How I Found Out About This Card -
A friend of mine (who has trouble with credit) received a "pre-selected" application, applied, and received the card. She missed making her payment one month and suddenly realized the horrendous APR she was paying. At that point, she asked me to review the terms of her account.
She accepted the Aspire card because she has less than stellar credit and she was excited about being "pre-selected", figuring she was finally turning the corner on her credit woes. Well, she can turn the corner, but what is she walking into? The choice is all in how she uses it. If she does not pay her balance in full each month and take care not to spend what she does not have, she will be positively impacting her credit. However, if she cannot control her spending and falls behind in paying this bill, it is likely she will be in debt to Aspire for the rest of her natural life.
We had a frank discussion of her credit habits and she decided to cancel this card and pay off the balance. The risk was simply not worth any of the benefits, and she did not appreciate her treatment by the customer service representatives she spoke with.
- Something Fishy -
When I called the customer service number I was told by three different representatives that they would not disclose any of the terms or other information about this card to me unless I was an account holder. What are they afraid of? I asked to speak with a supervisor and was continually placed on hold, with eventually the same representative coming back and parroting another excuse. And this is how they treat a potential customer!
Me: Are you refusing to let me speak to a supervisor?
Aspire: No, ma'am, I am telling you that you cannot get any information about this card until you apply.
Me: Then you would be in violation of Federal Banking Regulation Z which requires you to disclose all terms and fees prior to my applying. Are you aware of that? I work for a bank.
Aspire: Hold on please...
Aspire: Ma'am, I cannot put you in our management area unless you have an existing account and I cannot answer your questions about this card.
Me: So you are refusing to answer my questions about this card and refusing to allow me to speak with a Supervisor, correct?
Aspire: Hold on please...
Aspire: Ma'am, I cannot put you in our management area unless you have an existing account and I cannot answer your questions about this card.
...Etc.
- In Conclusion -
I would not mess with a company like this. They are not interested in helping consumers establish credit, but rather are seeking to capitalize on those with poor credit by ensnaring them into usurious rates. If you revolve any kind of a balance with this APR and fee structure, you will be trapped in a horrific cycle of escalating monthly balances, even without any additional purchases, and your attempt to establish some good credit will only lead to more bad credit and higher debt.
The question is: Do you aspire to go broke?
The answer is: NO!
You may be interested in these other related reviews:
• Save Money, and even Make Money, by Choosing the Right Credit Card: by an Industry Insider
http://creditexpert.epinions.com/finc-review-6FE-73F2D35-38EE9644-prod6
• Establishing Credit: Tips from an Industry Insider
http://creditexpert.epinions.com/finc-review-69E0-6DFB00-38BEFECC-bd3
•YES, You CAN Repair your Credit: an Industry Insider Shows You How
http://creditexpert.epinions.com/finc-review-23B7-83662BE-38F10F1B-prod6
•Horror of Another Kind: Credit Card Fiascoes: How other people's mistakes can save YOU money!
http://creditexpert.epinions.com/finc-review-5BF7-C7714F5-38E88159-prod2
Recommended:
No
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Epinions.com ID:
netKat
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Member: Kat
Location: Maryland
Reviews written: 166
Trusted by: 885 members
About Me:
Analytically inclined mom, bank officer, freelance writer, and internet addict.
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