High Interest Fees May Cause More Debt

During the height of the recession, many consumers routinely racked up debt with credit card companies simply to make their monthly payments. As a result, some experienced charge offs, which in turn made it harder for them to apply for additional credit lines.

While lenders have begun to lend to struggling borrowers, many of these consumers may be forced to consider cards with high interest rates for their credit needs.

First Premier Bank is one lender offering sky-high upfront interest rates which can range up to 79.9 percent, depending on a borrower's credit history, CNN Money reports. This means consumers who most need the cards for general use will be saddled with more debt simply for carrying a balance on the card.

Despite the increased risk the cards carry, nearly 700,000 customers have signed up for the card, the news source says. In addition, more than 50 percent of these cardholders are carrying a balance on the card, and causing themselves to incur more debt.

Recent government regulations also do not prevent the practice, as many consumers are agreeing to these charges upon application either by choice or by neglecting to read the fine print.