Is First America Credit a scam?

Answer 1

Kind of. First, do not confuse it with "First American Credit", a normal company.

"First America Credit" is a cash advance loan place that preys on those who cannot get traditional loans, manage their money appropriately, or do the basic math needed to know how much trouble they'll be in if they apply for this.

It's not a scam though, as they flat out do tell you how bad it will be. Just in a way that those who might most need them won't understand.

Here's the breakdown: If you get a cash advance from them of $100, you will be charged 10% interest per month. However, you will also be charged a "cash advance" fee of 10%. In other words, what you owe is going to go up by 20% each month.

Now, their "minimum" payment from you is ten percent of what you owe - and don't worry, they'll take it right out of your bank account, the details of which they'll have from you before they give you a dime.

Here's the fun part. If you got that $100, then after one month you owe them $120. You are only required to pay ten percent of what you owe. So they take that $12 out of your account. Then next month, you owe $108, plus $21.60 in the interest and fees, for a total of $129.60. They will take 10% from your account, which this time won't be $12, it will be $25.92.

So given that very high rate of interest and potential to run up devastatingly large amounts of debt, this is best avoided.