Fifth Third Bank "Early Access" Check Advances

Fifth Third Bank has been pushing this "service" pretty hard at their branches.  It's basically a pre-authorized payday loan account that you can access through your online account access (for a small 10% advance fee).   I guess they need a replacement for bad home loans.  Their stock price, as of this writing, is in the $1 range.

Early Access Terms:

  • "As a Fifth Third consumer checking customer, you may qualify for a line of credit that can be deposited immediately into your checking account for a cash advance."
  • "Please Note: This is an expensive form of credit. This feature is designed to help our customers meet their short-term borrowing needs and is not intended to provide a solution for longer-term financial needs."
  • "Advances are automatically repaid from your next direct deposit of $100 or more."
  • "Your maximum credit limit will be $500 or 50% of total monthly deposits (based upon a 3 month average) rounded up to the next $20 increment, whichever is lower."
  • "The finance charge is $1 for every $10 borrowed. This equates to an Annual Percentage Rate (APR) of 120%."

Fees:

  • "A 10% Finance Charge will be assessed for each dollar that you advance through your Fifth Third EARLY ACCESS account feature. For example, for every $10 that you advance, the Finance Charge will be $1, without regard to how long the advance remains outstanding."
  • Bad math: "For example, $100 Advance with a $10 fee = $10/$100 = 0.1% X 12 cycles = 120% APR.
    REPAYMENT"  (remember the Verizon dollars versus cents debacle?