We’ve all received one. Those annoying calls from telemarketers or robocallers. Day or night, they’re either trying to sell you something or trying to get your personal information.
While money may be a little tight for many during the pandemic, one side hustle is helping consumers turn those scam calls into cold, hard cash.
“The reality is, you don’t have to live with these robocalls anymore,” said Doc Compton, a credit repair expert in McKinney, Texas.
He’s capitalized on two federal laws that give consumers the power to turn those annoying calls into cash.
If the call you, they could owe you $500.
And if your number is on the national do not call registry, they owe you at least $1500.
Compton has developed a kit with step by step instructions that he sells online for $47.
Here’s how it works:
Compton said the most important step in the process, is that you have to take the call.
You’ll want to keep the caller on the phone to try to get as much information as possible about who they really are. Then, ask for the name of the company, a website and an address.
The kit shows you how to then use that information to track down the company behind the call and has templates for a demand letter you’ll send to the robocallers and wait for them to contact you to make you an offer.
“You’d be surprised how they’re willing to play ball simply because they don’t want to go to court,” said Compton.
“It’s been very profitable for me. It’s helped me get out of debt,” said Matt McCormick who’s turned this into a side hustle.
McCormick and his wife signed up for the kit in November.
“The smallest settlement that I’ve ever gotten was the first one that I got for $1000. The biggest one to date that I’ve ever gotten which was in July was $13,000,” said McCormick.
That settlement was for eight different calls from the same business.
And even while talking to a KXAS / NBC 5 Responds producer—McCormick got a call from a company trying to sell him solar panels!
The McCormick’s said the extra cash has been helpful during the pandemic.
“For the people that are not working right now due to the pandemic, these people in these call rooms just like the call I just took. They’re working. Their sales teams are working. And they’ve got money and it’s your job to put the money in your pocket and that’s what I do,” said McCormick.
Since 2018 Doc said he’s helped thousands of people collect millions of dollars in settlements from robocallers.
Instant Approval Credit Cards | Bankrate.com
Instead of waiting days for an approval decision only to be turned down, you can pick the card you want, apply online and find out within seconds whether your application was approved or declined.
While many cards give you a chance to be approved instantly, the cards that list this feature front and center are typically geared toward people with a less-than-ideal credit score.
But like many so-called “guaranteed approval,” “no-credit-check” or “soft pull” credit cards, cards marketed as offering approval in seconds may not be your best option long-term.
That said, a few cards offer both instant approval and hold their own as credit-building or rewards cards. Read on to learn more about how instant approval works, which cards offer it and how it differs from prequalification or an instant use card number, as well as some of the best instant approval credit card offers.
What is an instant approval credit card and which cards are available?
Instant approval allows you to find out whether your application for a new credit card has been approved or denied within seconds (or, at most, a few minutes).
Most major card issuers give you a chance to be instantly approved for some of their credit cards. The cards that make instant approval the norm for applicants, however, are typically credit-building cards, which are designed for people with a damaged or limited credit history.
These instant approval credit card offers feature a low entry barrier, making approval more likely for most cardholders. So it’s safe to conclude that instant approval credit cards don’t always require good credit.
To start, you’ll fill out an online application form with basic information including your name, address, annual income and Social Security number.
The card issuer will then run a preliminary credit check and, if you meet the basic requirements, approve your application on the spot. This is typically only a conditional approval, however—the issuer may examine your credit history more thoroughly before making a final approval decision.
While instant approval can save you some time and take some of the guesswork out of the application process, standard approval decisions generally don’t take too long (usually a few days or a couple of weeks at most). Indeed, according to federal guidelines, an issuer is required to let you know whether your application has been approved or denied within 30 days.
What credit score do you need to get instant approval?
No specific credit score threshold guarantees instant approval. As is true with all credit card applications, your odds of instant approval will vary considerably depending on the card you’re applying for and your credit profile; the higher your credit score, the more likely you are to be approved instantly.
For example, if you have a good—but not excellent—credit score, it’s unlikely that you’ll be instantly approved for a luxury travel credit card. But you may still be approved in the end.
If, on the other hand, you applied for a card that required only an average credit score, you’d have a much better chance of getting an instant approval. If you have a low or bad credit score, instant approval cards offers may be limited to cards like secured credit cards.
Instant approval vs. prequalified offers
While there is some overlap between instant approval and prequalified offers, it’s important to distinguish between the two.
With instant approval, your application is approved and you’re able to open a new credit card account in seconds, whereas with prequalification, an issuer performs a soft pull of your credit report and lets you know whether or not you meet the basic requirements for getting the card.
Getting prequalified gives you a good sense of your odds of approval but it doesn’t guarantee approval. You’ll still have to put in a formal application and face a hard pull of your credit report.
You can typically prequalify for a new card via an issuer’s website or a tool like CardMatch in less than 60 seconds, but even if you’re instantly prequalified and apply straight away, an actual approval decision may take longer.
Instant approval vs. instant use
Similarly, you may be instantly approved for a new credit card, but that doesn’t mean you can use it right away.
While some cards offer both instant approval and a card number you can use immediately, the inclusion of one feature does not guarantee the other.
This means that even if you complete a card application and see that you’re approved a few seconds later, you may still have to wait a couple of weeks for your physical card to arrive in the mail.
If you’re looking for a card that gives you access to your account information as soon as you’re approved, search for an “instant use” credit card instead of an instant approval credit card.
Approval decision times vary on instant use cards, but once you’re approved, you’ll be able to see your credit card number online or via an issuer’s mobile app and can start using it to make purchases immediately.
A number of major issuers—including American Express, Bank of America, Capital One, Goldman Sachs, Sutton Bank and Synchrony Bank—offer instant use on some of their cards.
Best instant approval credit cards
While instant approval is possible on a number of popular credit cards, including some of the top rewards cards on the market, the majority of cards that market themselves as “instant approval cards” are designed for cardholders with a damaged or limited credit history. These typically include secured credit cards and some store credit cards.
Because of their target market, many instant approval cards are hard to recommend due to their numerous fees, high APRs or bare-bones (or nonexistent) rewards programs.
Still, a handful of cards marketed as offering instant approval may be useful if you want to get a quick approval decision and start building credit or earning rewards.
|OpenSky® Secured Visa® Credit Card||Bad credit||$200-$3,000 (based on security deposit)||$35||Credit-builders who want to avoid a credit check|
|Self Visa Credit Card||No credit history||Varies based on how much you’ve saved in your Self Credit Builder Account (minimum $100)||None (Self account carries a one-time nonrefundable administrative fee of $9)||Credit-builders who want to build their security deposit gradually, instead of coming up with hundreds of dollars upfront|
|Amazon Prime Store Card||Fair credit||Varies||None||Users who want to earn rewards on online shopping (the card offers Amazon Prime members 5% back in rewards on Amazon.com purchases)|
|UNITY Visa® Secured Credit Card||Bad credit||$250-$10,000 (based on security deposit)||$39||Credit-builders who want a high credit limit to keep their credit utilization in check|
|Discover it® Secured Credit Card||No credit history||Up to $2,500||$0||Credit-builders who want rewards with no annual fee|
|Costco Anywhere Visa® Card by Citi||Excellent||Varies||Requires $60 annual Costco membership||Frequent Costco shoppers|
|Credit One Bank® Platinum Visa® for Rebuilding Credit||Bad to fair||Varies||$75 first year, then $99 annually||Credit-builders who want rewards|
The bottom line
Instant approval is a nice perk and may ease the frustration of applying for cards and waiting for days only to have your application denied.
Nevertheless, a quick approval decision shouldn’t be your top priority when you’re looking for the best credit card for you. Instead of focusing on how long an approval decision takes, work on finding and applying for the cards that best fit your goals and credit profile.
*The information about the OpenSky Secured Visa Credit Card, Self Visa Credit Card, Amazon Prime Store Card,UNITY Visa Secured Credit Card and Costco Anywhere Visa Card by Citi has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.
What Are Payday Loans? | Canstar
They are called payday loans, small amount loans, cash loans, small loans, short-term loans and more, but the allure of getting cash quickly this way can conceal significant hidden fees and costs that leave a lasting sting on your hip pocket.
Sometimes a crisis comes up in life, and you need money quickly. Or sometimes, despite your best efforts, you may fall behind paying living expenses like rent, electricity and food. If you don’t have an emergency fund or regular savings, you might consider asking a friend or family for help or borrowing some money from a credit provider.
Payday lenders often offer loans of up to $2,000 – promising fast, convenient and easy access to cash. But are they a smart choice for Australians financially?
What is a payday loan?
A payday loan is a loan of up to $2,000 that you have between 16 days and one year to pay back, according to the Australian Securities and Investments Commission (ASIC)’s Moneysmart website. Payday loans are also known as small amount credit contracts, or SACCs.
Lenders cannot legally charge interest on payday loans. However, there are often very high overall fees attached that aren’t always obvious upfront for borrowers. These fees are capped but can still be very high compared to most other forms of credit. They can include an establishment fee (up to a maximum of 20% of the amount borrowed), a monthly service fee (up to 4% of the amount borrowed, every month) default fees and enforcement expenses. Moneysmart warns that if you take out one of these loans, you’ll end up needing to pay back “a lot more than you borrowed”.
What are the pros and cons of payday loans?
Although getting a payday loan might seem convenient, the Financial Rights Legal Centre explicitly says “using a payday lender is not recommended”. Here are three cons of payday loans:
1. Overall cost
Payday loans bring high fees – such as an establishment fee (up to a maximum of 20% of the amount borrowed), a monthly service fee (up to 4% of the amount borrowed, every month) default fees and enforcement expenses.
“Digital platforms make payday loans very accessible, almost too accessible – but often, borrowers do not fully understand the costs, risks and consequences of these loans,” she told Canstar.
2. Risk of unmanageable debt
If you borrow money and need to repay it with high fees, charges and penalties payable, you will be more likely to get into unmanageable debt than if you accessed the money in a cheaper way. This can become a serious financial problem in the longer term.
3. Potential damage to your credit score
If you repeatedly shop around for credit and apply to multiple credit providers in a short timeframe, or miss any loan repayments, your credit score might drop, and this could stay on your credit history for some time. Having a low or bad credit rating can affect your borrowing capacity in the future. For example, it might affect whether you are approved for a car loan or a home loan, plus the interest rate a lender charges you.
Who uses payday loans?
Research by a national coalition of consumer advocacy groups, Stop the Debt Trap, shows over 4.7 million individual payday loans were issued for around 1.77 million Australian households between April 2016 and July 2019, generating about $550 million in net profit for lenders. Many Australians who are experiencing financial stress turn to payday loans, with earlier research showing payday loans are increasingly available on digital platforms. Often, vulnerable women, commonly with sole responsibility for children, are relying on payday loans as emergency cash for household expenses. These women are unfortunately also taking out multiple loans in many cases, according to Good Shepherd Microfinance.
Why are payday loans a poor credit choice?
If you are already in a difficult financial situation, payday loans can make it worse. Stop the Debt Trap’s research suggests around 15% of payday loan borrowers fall into a “debt spiral” within five years. Over this time, Stop the Debt Trap estimates, about an extra 324,000 Australians may progress towards a debt path that might lead to an event like bankruptcy.
What regulation applies to payday loans in Australia?
Under Australia’s credit legislation, including its responsible lending regulations, banks, credit unions, brokers and other lenders are regulated and licensed in Australia, and aren’t allowed to give credit to borrowers who can’t pay it back.
Additional responsible lending laws apply to small amount credit contracts (SACCs) under the National Consumer Credit Protection Act at the time of writing, including the fee caps discussed earlier. Recently, stakeholders including consumer groups have shared their views about proposed credit reforms as part of a Senate inquiry, with concerns there may be weaker protections for consumers in future from predatory lending.
What are some alternatives to payday loans?
Australians should seek free, professional help from a financial counsellor instead of taking on debt from a payday loan or an alternative like a personal agreement.
“Consumers who are experiencing difficulties making payments for utilities, telecommunications or loans can contact their service provider for hardship arrangements such as an extension of time for payment,” said Dr Chen.
“Additional help such as utilities relief grants or household relief loans may be available and people who are experiencing family violence and are facing financial difficulties can seek hardship assistance from their credit or utility provider.”
Dr Chen said that if consumers have trouble reaching suitable hardship arrangements with a credit or utilities provider, they could consider contacting a financial counsellor to assist with negotiations, as this might lead to better outcomes.
The NDH are both free and impartial. A financial counsellor can help if you need to “negotiate a settlement of debts” with existing credit providers, plus join calls with you as an advocate if you need support handling difficult money conversations with credit providers.
Separate to addressing how you manage debt, ASIC’s Moneysmart suggests the No Interest Loans Scheme (NILS) or a Centrelink advance payment may be suitable, cheaper options if you are eligible and need to get money fast.
What support is available if you are in financial stress?
Payday loans: frequently asked questions
What is a bad credit payday loan?
A payday loan, or small amount credit contract, or SACC, might be marketed to you as a ‘bad credit payday loan’. This means a lender is targeting the loan towards people who have a bad credit score, as they may be less likely to get approval for credit. Keep in mind that if you have a low credit score, you are likely already financially vulnerable – you could have fewer borrowing options than someone with a higher score. Making repeated requests for credit can negatively impact your credit score. If you are alternatively considering a bad credit personal loan, we’ve covered what to look out for.
Should you take out a payday loan?
The Australian Securities and Investments Commission (ASIC) says on its Moneysmart website that when it comes to payday loans, “there are cheaper ways to borrow money when you need it”, adding, “If you’re struggling to pay your bills, don’t get a payday loan.” To protect your credit score and finances, you might like to consider other options aside from a payday loan if you need to borrow money, such as a NILS loan or a Centrelink advance.
How much does a payday loan cost?
You can use the Moneysmart Payday loan calculator to help work out the true cost of a payday loan, modelling the costs based on the loan details such as the amount (up to $2,000) and borrowing term (from 16 days up to one year).
What is the interest on a payday loan?
No interest is allowed to be charged on a payday loan. However, there are often very high overall fees attached that aren’t always obvious upfront for borrowers. These can include an establishment fee (up to a maximum of 20% of the amount borrowed), a monthly service fee (up to a maximum of 4% of the amount borrowed, every month), default fees and enforcement expenses.
Are payday loans dangerous?
Research by Stop the Debt Trap suggests payday loans can be “devastating for the people involved” because “these products are aggressively marketed, which can drive people away from other services that may be more suitable, such as free financial counselling or no or low interest loan schemes”. The National Debt Helpline says the risks of payday loans include very high costs, needing to borrow again to repay the loan, a potential negative impact on your credit rating, high default fees, and being difficult to get out of. Plus, it adds, payday lenders usually sign customers up to pay by direct debit on payday. This can mean money is taken out of your income before essential expenses such as food and rent. If you find yourself unable to make ends meet, you could find yourself in a debt trap that brings more serious long-term consequences.
How do you take out a payday loan?
Consumers can take out a payday loan online or by contacting a credit provider that’s offering high-cost, short-term loans directly over the phone or in person. Lenders will usually require applicants to share information that relates to their income, identity and the loan purpose. If you have a severe history of default or a bad credit rating, you might get turned down for a payday loan, and making multiple requests for credit can have a negative impact on your credit rating.
Can anyone get a payday loan?
Payday lenders tend to be more flexible in their borrowing requirements than major banks. So, if you’re self-employed or have a poor credit rating, you might pass some payday lenders’ borrowing standards. However, you’ll still need to show you have capacity to repay the loan, and this will be assessed based on factors such as your income, spending, identity, employment and credit score. If you are under 18, are not an Australian citizen or resident, have unstable or insecure employment, have a history of poor spending habits, have a low income or have a bad credit score, you might be declined access to a payday loan. Speaking to a financial counsellor for advice on getting your debt under control could be helpful, ideally before you consider applying for a payday loan. Free, confidential advice is available from the National Debt Helpline on 1800 007 007.
Main image: Rawpixel.com/Shutterstock.com
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Can I make extra repayments to a personal loan?
Paying off your personal loan is a good feeling but paying it off early by making extra repayments is an even better one.
If you have a personal loan, you may be wondering whether you can make extra repayments, and what the benefits and disadvantages – if any – may be.
How personal loan extra repayments work
Some personal loan lenders will allow you to make additional repayments on top of your regular loan instalments. This may help you to reduce the loan principal much faster than if you made the minimum-required payments. Plus, by reducing the principal amount you’ll potentially pay less interest over the life of the loan.
For example, if you had a 5-year, $20,000 personal loan at a rate of 6%, if you made only the standard $387 monthly repayments, you’d pay $3,199 in interest. However, if you paid just an additional $50 a month, you’d shave 5 years off the loan and only pay $2,768 in interest.
|Personal loan||Monthly repayments||Total interest charged||Total cost of loan|
|No extra repayments||$387||$3,199||$23,199|
|Extra repayment of $50 a month||$437||$2,768||$22,768|
Source: RateCity.com.au. Note: Figures based on hypothetical 5-year, $20,000 personal loan at 6%. Does not factor in fees or rate fluctuations. Assumes making $50 in extra monthly repayments from beginning of loan.
However, what you pay in interest is how the lender makes its money, so not all lenders will allow you to do this. Some may even charge you a fee for making extra repayments. It’s worth reading the product disclosure statement associated with the personal loan to double-check this first.
What other features may a personal loan offer?
If your personal loan lender allows you to make extra repayments, chances are they may offer another potentially competitive feature as well: a redraw facility.
A redraw facility allows personal loan customers to draw down on some, or all, of the extra repayments they’ve made over the years while repaying their loan. This may come in handy in the event of financial stress, such as overdue or unexpected bills, or even if you just want to finance a family holiday.
Keep in mind that once you withdraw any extra funds you’ve paid into your personal loan, you’ll be increasing the principal amount owing. This in turn may increase the amount of interest you’ll be charged and may mean your regular repayments increase.
Some personal loan lenders may require you to pay a certain amount in extra repayments before you can access these funds. Also, personal loan redraw facilities are typically reserved for variable rate loans. If you’re in need of a fixed rate personal loan, this feature may not be available to you.
What are the pros and cons of making extra personal loan repayments?
Making extra repayments on your personal loan can go a long way in chipping down an otherwise intimidating debt. But there are both risks and benefits that are worth weighing up.
Benefits of extra repayments on a personal loan:
- Pay off your debt quicker – The most significant advantage of making extra repayments is that you may be able to shave months off your loan term.
- Pay less interest – The lower your principal amount owing, the less interest you’ll be stung with.
- Access funds – If your lender offers a redraw facility, you may be able to access these funds when you need them.
Disadvantages of extra repayments on a personal loan:
- Your current lender may not offer it – If you’ve already signed up for a personal loan and want to make extra repayments, you may discover your lender does not permit this. If this I something you really desire for your personal loan, it may be worth considering refinancing.
- Fees and caps – Some lenders may charge you a fee for making extra repayments. And some may cap the amount you can pay, or even limit the amount you can withdraw if using a redraw facility.
- Variable rate only – Generally speaking, making extra repayments or having a redraw facility may be reserved for variable-rate loan customers. If you’re set on a fixed rate loan, check if extra repayments are allowed before proceeding.
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