Seriously. In fact, they were so kind as to send me a pre-approval letter for a $50,000 loan at 3.89%, and a check designed for a car dealership (it is a sight draft to be paid to the dealer and has blanks for vehicle information including make, model, year, VIN, etc.). Check activation only requires a phone call from my end.
It’s great to know that my credit is good enough to get a decent interest rate on a new car and that I am pre-approved for a $50,000 loan. But I have a problem with the way the bank handled this. I don’t need a new car, don’t want a new car, wouldn’t spend that much on a car, and certainly don’t want loan checks sent to my house (this has fraud potential written all over it if it falls into the wrong hands!).
While I didn’t like receiving this offer, I did learn a few things.
How to stop this from happening again
My immediate action was to call my bank and request they never send these offers to my home again. I understand they are doing their job in trying to drum up new business, but I don’t want loan checks sent to my house.
Credit card companies are notorious for sending unsolicited cash advance checks which come with hefty fees attached. I also call credit card companies and request they not send cash advance checks. Both of these are a “convenience,” according to the banks and credit card companies. But all they really do is make it easier for you to spend your money, or ID thieves and opportunists to steal from you. Cancel these checks!
Don’t let anyone tell you how much you need to spend
Wow. $50,000 is way more than I need to spend on a car. My wife and I each bought new cars a couple years ago and spent about $10,000 less than our loan offer… for two cars! When I bought my car, the dealer tried talking me into a larger model car with more add-ons, bells and whistles. Remember, it’s his job to sell, and your job to buy only what you need. I stood firm and bought the car I wanted at the price I wanted.
Don’t let anyone tell you when you need to spend
We’ve had our cars for 2-3 years now and they are paid off. The first thing our bank did after we paid the last loan payment for our car was to offer us another pre-approved car loan. This is probably an automatic action in their software.
Did the customer finish a loan payment? Yes… Great! Send them another loan offer!
No thanks! I’ll buy a car at my pace and when I need it. Not just because you tell me I can afford it!
A Fool and his money are soon parted
It’s your job to be vigilant with your spending. If you let banks and other lenders dictate your spending habits, you will never get ahead in life. Buy what you need, when you need it. But ignore the suggestions of people selling a product. Their only interest is making your money, their money.
Patrick is the author of Cash Money Life, a blog about personal finance, career management, and self-improvement. He served in the United States Air Force, has traveled to over 35 countries, and is a fantasy baseball champion. He is an active lender at Prosper.