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November 24, 2004

Not my Pay Pal

I love Frontline, what an entertaining show. So last night I was watching their examination of the US credit card industry and thinking about my experiences in college with 25% interest rates and $20 late fees for being a couple days late on payments. The experience was bad enough that I no longer carry a credit card, aside from Amex and a cash card. The Frontline show was pretty shocking, it seems 30-35% interest rates and 30-40 dollar late fees are not uncommon nowadays, and I thought I had had it bad. So I'm collecting my recently hard-earned eBay dough off PayPal.com this morning after watching the show, and I come across this offer for a PayPal "0% Intro APR" card. Offered by, guess who? Providian Financial Corporation, the "bad guys" reprimanded by the OCC a few years ago. Taking a cue from Frontline, I read past the "0% APR" headline and saw just what the show described; -After the 6 months at 0% APR, you will pay "9.99% to 23.99%" interest on revolving balance (take a guess which rate they will decide to assign you after 6 months). -The "default" APR is 29.99%, or, let's just be honest and say 30%. -You will be in "default" if you "fail to make at least the minimum payment when due," meaning if you are a day late you will be in "default". -You can enter "default" status if you miss (or are a day late with) a payment with a different credit card company, other than Providian! Yipe! That's probably just the tip of the iceberg, though, judging by Providian's history.