Earlier this week I heard about a new loan program called Zidisha. They are a micro loan facilitator with the goal of reducing costs and increasing the impact of lending to the borrows by reducing the middlemen. I’m going to sign up for them and report back as a follow up to this post on Kiva.
The borrowers are coming from poor countries, and in many ways this seems like Kiva.org, a company that I have a love/hate relationship with at the moment. Kiva is great in that it gets money out into the field in places where people wouldn’t normally be able to access borrowing, and you can loan from $25 upwards, typical repayment rates for the loan are around 99.01% so if you put your money in you pretty much get it back out again and are able to reloan.
I use Kiva to increase my credit card spend whilst helping out folk. There is no profit from the loan other than the miles you get back, one thing that is very cool about Kiva is that you can pay for the loan with a gift card, and then once repaid take the cash and transfer it to your bank account via Paypal for no fee. This can be a good way to meet minimum spend on a new credit card, providing you can float the difference until it is repaid to you.
For the Travel Hacks out there here is the best way to meet a $5K spend on an American Express Card, such as the SPG Card which I hold in very high regard.
1. You must have $5K in cash available to pay down the balance immediately, not only do we not want to pay interest on the card we don’t want high balances showing up on our credit report, so pay it down ASAP, and chances are it will not report so you wouldn’t lose points on that month’s report.
2. Sign up for a Big Crumbs account – please feel free to use my link so I get a referral! Here: Bigcrumbs Signup
3. Type ‘American Express’ into the search box in Bigcrumbs once you are logged into your new account. This will bring up 2 sites both currently offering 1.4% cashback- make sure you use Personal, select the classic card and 1x$3000 and 1x$2000 for $5000 (the max you can do in one transaction).
4. Check out with Express 2nd Day Shipping. Total cost will be $3.95 per card, plus $8.95 shipping for $16.85
5. When the cards arrive register them either online or using the phone number on the back of the card, this puts your personal info onto the card and allows you to use them online. Once you have done this you can add them to your Paypal account.
6. Sign up with Kiva.org, select your borrows and make $5K of loans – personally what I do now is sort the list by ‘repayment term, shortest to longest’ then give a bunch of $25 loans to people, 200 of them in this case – the idea is that if you spread them around like this then if one or two should default they are only impacting a max of $25 rather than your entire loan.
7. Pay your credit card bill now! And watch your repayments coming monthly, you can either withdraw monthly or let them build up a bit and then transfer to your bank account.
Results:
1. You just helped 200 people in poor countries achieve a better standard of living by your altruism! That alone is fantastic.
2. If you used the SPG Card you just earned 30K SPG points, valued to me at about $1,000
3. You spent $16.85 for the cards and shipping BUT because you used Bigcrumbs you got 1.4% cashback which is $70, so you netted a profit of $53.15
Don’t use Citibank cards for this – they posts as a cash advance- actually I reduce the cash advance limit on any card I do things like this with to zero or the minimum so it cannot post, which helps if any other bank starts doing what Citibank does.
Give yourself a big pat on the back for being awesome, and getting paid for it!
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