With a new federal credit-card law coming, PartnersFirst's model of no fees, steady rates, and reduced risk may point toward the industry's future
The Service Employees International Union has frequently blasted credit-card issuers over the years for abusive lending practices. When the SEIU started searching for a firm to create a branded card for its 2 million members, union leaders demanded fewer fees and less onerous penalties. "We wanted a card that was more consumer-friendly," says Jeremy Smith, a deputy director at the SEIU. "[Most] card companies wouldn't consider our proposal."
Hal Erskine, the founder and president of PartnersFirst, did. In April his Wilmington (Del.) financial firm introduced an SEIU credit card that met the union's tough standards. The card, which has an average interest rate of 16%, doesn't levy annual fees or impose late-payment charges. And PartnersFirst won't hike rates or change terms without the SEIU's permission.
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