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$150 For Opening a Loan - What's the Catch?
Old 09-07-2019, 07:39 PM   #1
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$150 For Opening a Loan - What's the Catch?

Citizen's bank sent me an ad: "For a limited time, receive a $150 Amazon.com Gift Card upon closing on a new personal loan."

According to the ad, all I need to do is close on a $10,000 loan to get the card. The ad specifically says "No fees ever." It goes on to say "$0 origination fee, $0 prepayment penalty and $0 late fees."

So what's to stop me from taking the loan, repaying it in full the next day, and blowing $150 on stuff I don't need from Amazon?

Of course, I have to actually apply before I can see ALL the fine print. I'm guessing there's a catch in there somewhere. Anyone know?

FYI, I don't really care if there's a short-term impact to my credit report. I have no intention of borrowing money or taking out a loan anytime soon, if ever.
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Old 09-07-2019, 07:41 PM   #2
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Probably nothing to stop immediate payment. They know the odds of that are so slim they can afford a few "flakes".
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Old 09-07-2019, 08:53 PM   #3
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What's the interest rate?
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Old 09-07-2019, 09:04 PM   #4
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If you can pay off the loan via electronic payment, you'll probably owe 1 or 2 days of interest; seems worthwhile provided no funny fine print such as early payment penalty.


P.S. Sorry for this off topic comment but it is funny. A few years ago I got an unsolicited letter advising I was pre-approved for a loan. One of the loan's benefits, according to the letter was "No late payment fee if you pay on time!"
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Old 09-07-2019, 09:08 PM   #5
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Originally Posted by mystang52 View Post
If you can pay off the loan via electronic payment, you'll probably owe 1 or 2 days of interest; seems worthwhile provided no funny fine print such as early payment penalty.


P.S. Sorry for this off topic comment but it is funny. A few years ago I got an unsolicited letter advising I was pre-approved for a loan. One of the loan's benefits, according to the letter was "No late payment fee if you pay on time!"
My thought is maybe they're charging 18% interest and there is a minimum of 1 month interest no matter how quickly you pay it off = $150
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Old 09-07-2019, 10:14 PM   #6
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Bingo!

$10,000 minimum loan, 1.5%/mo, 1 month minimum charge.
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Old 09-07-2019, 10:17 PM   #7
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It may be real.

I was given three checks to write up to my credit limit, and I would still get rewards. ~$25K at the time. I wrote all three, one at a time, and received $650 back in rewards. It cost about $200 (at 18%) to do it. The rewards were Speedy Rewards checks, only redeemable at the gas station. They came in a manually addressed envelope.

The next offer was not good for rewards bonuses.
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Old 09-08-2019, 06:51 AM   #8
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What's the interest rate?
"Fixed rates as low as 6.79% APR" according to the ad.

So is the consensus that I'd have to pay at least one month's interest?

That brings the "take" down to under $100. Probably not worth the time it'll take to wade through the fine print, and the risk that I'll end up somehow paying more in interest than I get back.
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Old 09-08-2019, 07:41 AM   #9
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"Fixed rates as low as 6.79% APR" according to the ad.

So is the consensus that I'd have to pay at least one month's interest?

That brings the "take" down to under $100. Probably not worth the time it'll take to wade through the fine print, and the risk that I'll end up somehow paying more in interest than I get back.
I would simply call their customer service number and directly ask the question.

However, in general, applying for a loan is more time consuming and involved than the credit card or bank account bonus offers. There are still plenty of bank account and credit card offers paying $100 to $750 which simply take a couple minutes to do online.
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