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