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Paying Fees for Guaranteed Loan or Credit Cards

There are very few things in this world that I know for certain – New York sports teams will always be near the top of payroll lists and there’s no such thing as a guaranteed loan or a guaranteed credit card. So when I read about this scam, the scam sirens were going off like crazy in my head. Banks can’t offer pre-approved guaranteed loans because it’s simply not possible to underwrite a loan without know the borrower. The same is true for credit cards. Any company that offers to do that is lying!

This falls under the class of scams where the scammer gets you to pay them first, up front, with promises of benefits down the road. Whether it’s a job with an application fee or sending $5,000 to a Nigerian Prince so he can wire you $5 million, it’s a new wrinkle on an old scam. I think people succumb to the idea that by paying a few extra dollars, they can get access to something they otherwise couldn’t get. For consumers with poor credit, it’s very tempting to think that you can pay $500 and get access to a credit card. The reality is that once you pay, the scammer disappears.

One word of warning – there are credit cards, known as secured credit cards [3], that will charge you an application fee. Unfortunately for some consumers, those are the only cards they can get access to. That’s the only case in which an application fee makes sense and you’ll never see an application fee for an unsecured card.

If you see an offer like this, run the other way. If you are in need of credit or a loan, consider going to your local credit union or bank and talk to a loan officer. They are usually very accommodating and can work with you to get you a loan or credit card. It might not be today, it might not be tomorrow, but they can set you on the path towards what you need and you won’t be meeting in a back ally.