A wonderful reader sent in this mailer from Xact which is a great example of the type of advertising that always makes me want to know more.
I admit the mailer is a bit blurry but the mailer alone was enough to start me digging. There were a few key phrases that made me want to know more.
So What Caught My Attention?
The mailer mentions “no in-store hassle” and the website says “Loan due date aligned with payroll date” and for me that sounded a bit like a payday loan. – Source
The mailer did not seem to talk about interest rates so off to the Xact site, I went.
In the small print on the website, I found “Annual percentage rate “APRs” range from [145% – 225%]. APRs will vary depending on credit qualifications and loan amount.”
That is pretty steep.
They even provide an example, “Payment amounts vary by loan term and rate. As an example, if you borrow $1,500 with a 157.42% APR and an 18 month term, your payments would be $159.97 per month.”
Axcess Financial Services
The website terms and conditions say “This Web Site contains material that is either owned by CCBank, Axcess Financial Services, or licensed to CCBank or Axcess Financial Services. The service marks, trademarks, or copyrights of CCBank, and Axcess Financial Services or its subsidiaries or affiliates include, but are not limited to Axcess, Axcess Financial, Check ‘n Go, and Allied Cash Advance.” – Source
It’s just my opinion but that seems a whole lot like a payday loan pitch to me.
The National Consumer Law Center had published a guide on the relationships between banks and payday lenders.
The guide says, “Check ‘n Go offers the Xact installment loan through FDIC-supervised Capital Community Bank. The loans range from $1,000 to $5,000. Rates range from 145% APR to 225% APR. Xact loans are offered in several states that do not allow installment loans at those rates. Check ‘n Go also directly offers high-cost installment loans in several other states.” – Source
The NCLC site says, “Rent-a-bank schemes are of questionable legality. Lenders pick and choose where they lend, generally avoiding states that vigorously enforce their laws. At least 10 high-cost consumer lenders (American First Finance, Axcess Financial, Check Into Cash, EasyPay, Elevate, Enova, LoanMart, OppFl, Personify Financial) are using five FDIC-supervised banks (Community Capital Bank, FinWise Bank, First Electronic Bank, Republic Bank & Trust (Kentucky), TAB Bank). The payday lender CURO was also using OCC-supervised Stride Bank for rent-a-bank schemes but recently stopped. Others have targeted small businesses.”
My Best Advice
Hey, if you want to take out a payday loan with steep interest rates, that’s up to you. However, if you get a Xact mailer like the one shown above, it will make sense to understand what you might be applying for before you turn over your personal information.
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