Review of the Continental Finance Mastercard

The Continental Finance MasterCard issued by First Bank of Delaware, is a subprime credit card for consumers with bad or no credit and actually has three versions of cards for this market which include the Continental Finance Gold MasterCard, Continental Finance Classic Blue MasterCard and the Continental Finance Classic MasterCard (which essentially have identical fees).

How Does the Continental Finance Card Work? - Fees are typical with subprime cards and the Continental Finance MasterCard has its share. First, there is a one-time account set up fee called the "Account Processing Fee Finance Charge" which will be anywhere between $75 and $200. Then, when your account is opened you will be charged an annual fee that ranges from $25.00 to $75 and will be charged the annual fee each year thereafter. You will also be charged a monthly account maintenance fee of $10.00 to $18.00 each month beginning with the second statement.

Some Gotchas! - You should note that if either you or Continental Finance cancels the account, you will continue to be billed the account maintenance fee until your balance is paid in full. Another thing to be aware of is that new cardholders begin with a credit limit of $300. After the annual fee, account processing fee finance charge and monthly account maintenance fees are deducted, your available credit limit will be around $50 to $150 (depending upon which card you receive and the fees associated). The maximum credit that you will be given over time is $2,000, so you can at least build it up a little, but if you do receive a credit limit increase, you will be assessed a Credit Limit Increase fee (again called a finance charge) that will be from $25.00 to $30.00. This fee is charged each time you receive a credit limit increase.

The APR ranges from 9.75% to 19.92%. If you have bad credit or have recently filed bankruptcy you will most likely receive the higher interest rate which is typical of subprime cards, but unlike most cards where the daily periodic rate is used, the Continental Finance Mastercard uses the monthly periodic rate (which technically results in a lower effective rate).

Continental Finance vs. First Premier - Let's do a little peer comparion and start with the First Premier Bank. In comparing the Continental Finance and First Premier, this is one instance at least where First Premier is the better card. The Continental Finance cards offer about the same benefits but charge an enormous amount of fees even for a subprime credit card. One good thing about Continental Finance is that they use the monthly periodic rate rather than the daily periodic rate and cardholders get a 25 day grace period (First Premier has been charging some customers as an APR as high as 79.9%!). You also have the slight chance of being one of the consumers that are approved for a card with a lower APR and lower fees, but if you have filed bankruptcy recently or know for certain that your credit is bad, you should probably not count on qualifying for any of the cards with Continental Finance that offer these lower rates.

Continental Finance vs Tribute MasterCard - Another well known sub prime issuer is the Tribute MasterCard from Compucredit. The Tribute charges an annual fee of $150 and a monthly processing fee of $9.95 (which works out to $119.40 a year). Like Continental, it also gives an initial limit of $300. Fee wise, it's hard to say which card has the lower fee simply because the fees charged by Continental varies.

Continental Finance vs Orchard - Perhaps the most well known "bad credit card" is Orchard Bank (which is actually owned by HSBC). The fee structure of the Orchard Bank Mastercard (see our review) is much lower than Continental. Like Continental fee structure, the Orchard Bank's Fee structure varies depending on the card that you will issued. Below is a table highlighting those fees.



Should You Get This Card? - If you are looking to rebuild your credit after it has taken a hit, or perhaps after a bankruptcy, you will no doubt get offers from lots of these companies and sub prime issuers (including Continental Finance). But the fees you face are very high (the cost of having bad credit). But when we compare Continental Finance with other sub prime cards, I think it is clear that you should stay clear because of the very high fees you face. After deducting them from your initial credit line ($300), you are already saddled with a balance (which is high relative to your credit line). Among all the sub prime cards, the Orchard Bank credit card probably has the most reasonable fees and we recommend that you get that card instead.

Update - Continental Finance is no longer offering this card. In fact cards like Tribute, and First Premier are no longer being offered due to a variety of reasons. The first is that the CARD Act now prohibits initial fees to exceed 25% of initial credit given. This ruling alone has wiped out the viability of many sub prime issues. First Premier was charging APR as high as 79% and has recently stopped their offerings as well (probably due to bad publicity). Orchard Bank looks to be the best bet if you have bad credit.