credit Tag

26 Jul Credit Unions: Lots Better Than Payday Loans

Payday loans are horrible.
  • Interest rates as high as 1,500% per year (that's One Thousand Five Hundred percent per year, and yes, we've seen them this high).
  • Wage withholding.
  • Repayment terms that lock you into an endless cycle of borrow and pay that you can never get out of.
  • Abusive collection practices.
So why do people borrow money from people like this on such outrageous terms? Because, as one blogger put it, "When the landlord is pounding on the door demanding rent, the kids are crying because the kitchen is empty, and the electric company is hauling the meter out of the house for non-payment, what would you do?" Well, what can you do other than using a payday lender? The answer? Check with a credit union.
Read More

19 Jul Credit Out of Control, Part Three – Debt Consolidation

So you've decided to buy that new cell phone or new car. (see Parts One and Two) But your monthly payments are a pain in the neck. The bills come at all different times of the month and you don't have enough money to make all the payments. What do you do? Borrow more money of course. Watch those commercials on TV. They offer any number of ways to make your dollar stretch further. Get a home equity loan, a new credit card or buy on deferred billing. That will help you have more stuff without paying more money right? Remember that old saying, "If it sounds too good to be true, it probably is." There are consequences to any of the options.
Read More

17 Jul Credit Out of Control Part 1 – Commercials

Buy now, no payments until January 2010! Zero percent interest! No closing costs! Life, it takes a credit card! Priceless. Take this quiz. Over the next twenty-four hours count how many times you see or hear a commercial for a credit card, car dealer or furniture store with special financing, or a mortgage company or bank urging you to refinance. This thought occurred to me recently while watching the evening national news. Five commercials played during a break. When the news resumed, I found myself trying to figure out what I had just seen. Then it hit me - of the five commercials run, they were (in order) a credit card company, a local car dealer offering to 'hook you up', a furniture store asking you to 'come on down' with delayed billing, a mortgage company suggesting that you re-finance to consolidate bills or do home improvement and then another credit card company hawking their debit card product. Each and every commercial was trying to get you to incur new debt! The next commercial break started with an ad for a Credit Counseling company promising to get you out of debt without bankruptcy.
Read More

14 May What Is A Payday Loan?

Apayday loan is a short-term loan designed to provide cash between paychecks. You've seen the signs (typically around military bases) and heard the ads on TV. Easy cash when you need it. A payday loan - but what is it?

While it sounds helpful, the reality is often quite different. Have you ever heard the song, "Sixteen Tons"? A Paydap loan can be forever.

The mechanism puts a deposit in your checking account for the amount of the loan minus some 'fees' and is repaid by direct debit of your checking account when the loan is due. The loans are typically easily renewed and often carry high interest rates because, as the industry claims, the risk of default is high. i have personally seen Annual Percentage Rates as high a 1,575%. While some states have attempted to regulate or outlaw them, a payday loan is only a click away on the internet.

Read More