| Could bad credit payday loans be the answer | | | | |
| consumers with low bank accounts have been | | | | Several sources, including a consumer report |
| looking for? Is there any harm in using these | | | | by the FTC (Federal Trade Commission) and the |
| services? Aren't they better than using | | | | CFA (Consumer Federation of America) state |
| credit cards or going hungry? | | | | that usual the usual APR is between 350 - |
| | | | 650% with some as high as 780%. |
| Have you seen the commercials? Cute | | | | |
| characters promise financial prosperity. | | | | A loan of $100 ranges in cost between $15 - |
| Happy, professional individuals appear to | | | | $30. If the loan is not repaid by the pay |
| regularly visit their corner pay day loan | | | | date then it can be renewed with another fee |
| shop as proudly as cashing a check at the | | | | due at each renewal. A loan of $100 can cost |
| bank. Customers at the grocery store all | | | | $60 in fees after 3 renewals. |
| recommend pay day loans as the easy solution | | | | |
| for a lack of funds. | | | | WHO BENEFITS? |
| | | | |
| WHY USE A PAY DAY LOAN? | | | | Based on the warnings issued by federal and |
| | | | consumer organizations it is clear that using |
| Some individuals reason that paying a bill | | | | pay day loans or cash advances from these |
| with borrowed money is better than receiving | | | | businesses can often lead to more debt and |
| bad credit marks because of not paying the | | | | problems. Some sites were reported to |
| bill. This is understandable. However, some | | | | automatically roll over the loan and only |
| financial institutions are willing to make | | | | withdraw the renewal fee on the pay date. |
| the occasional exception if contacted about | | | | Other sites surveyed by the CFA required |
| the situation. Or there may be a small fee, | | | | customers to agree in contract to not |
| but not a credit report made. | | | | participate in class action suits or to file |
| | | | for bankruptcy. |
| Using it for groceries or other items? | | | | |
| Consider the true cost before making a | | | | For those who are having debt problems it is |
| decision. Compare the cost of using a pay day | | | | recommended to seek no- or low-cost credit |
| (or cash advance) loan to the fees charged | | | | counseling from a local non-profit |
| for taking a cash advance on your own credit | | | | organization. These organizations can help |
| card. Can family help? Often those who are | | | | with reducing current interest charges and |
| forced to use pay day loans are not able to | | | | lowering monthly payments. If the problem is |
| repay the loan by the next pay check and that | | | | budget, you should look to a financial |
| can lead to a cycle of debt and stress. | | | | planner who can help you to manage the money |
| | | | you do have and avoid using credit at all. |
| WHAT IS THE COST? | | | | |