A cash advance payday loan is a particular type of loan that could be best described as a loan of convenience. Other kinds of loans like installment loans let you borrow a chunk of cash and then pay it back gradually in exchange for a fee – usually in the form of regular interest payments. Then there are revolving lines of credit such as credit cards that let you borrow or charge a certain amount – up to a limit – and once you pay it off your credit limit goes back up again so you can borrow or charge some more. But a payday loan has one benefit to the borrower that is unique and different from those other types of traditional loans. What the payday loan does – as its name implies – is it gives access to your paycheck or payday funds before you actually get paid.
You walk into a payday loan establishment in other words, and borrow money. In exchange for getting the cash in your hand you agree to repay the loan – plus whatever fees, charges, or interest that the payday lender adds on top of that amount – as soon as your actual payday arrives and you get your check from your employer. Payday loans are really about as simple as that.
But just because the concept is simple and straightforward, that does not mean that borrowing with a payday cash advance style loan is always so simple. The fact is that these loans – which are one of the most popular types of short-term loans now available across the USA – are also one of the most controversial kinds of loans.
While many people passionately support them and emphasize their importance – especially for working class people who do not have much savings or other sources of income to fall back on between paychecks – there are just as many consumer advocates who complain that cash advance payday loans are a rip-off for the consumer. That’s because many cash advance loans charge an extraordinarily high rate of interest. It is not uncommon to borrow $100 for just a few days or weeks and pay a fee of $15-$18, for example, and experts point out that that works out to a much steeper rate of interest than most people are used to paying.
For a two-week loan of $100 that comes with a price tag of $15 in interest charges, for instance, the annual percentage rate or APR is a whopping 390 percent. Normally credit card companies and banks charge more like 5-10 percent for their APR, and the ones that are really expensive rarely hit their customers with an APR that exceeds 30 percent. So using a cash advance payday loan can, in fact, cost more than 10 times what the highest rate on a typically credit card costs – and up to 40 or 50 times as much as more competitively priced bank or credit card loans.
So now you are probably wondering why anyone would use a cash advance payday loan, and why they are still so popular despite the added costs. The reason is that there are millions of people who do not have access to those more reasonably priced ways of getting fast access to needed cash, and for them the payday loan concept can mean the difference between having money to pay a bill and missing a payment. If you miss a payment, then you get socked with enormous penalties. Bounce a check at a bank, for instance, for $100 and you might end up paying $35 in bounced check charges – which is about twice as much as you would have to pay to get a $100 payday cash advance loan to cover that check so it won’t turn to rubber and bounce. Then there are the dings on your credit history for missing a payment, making a late payment, or writing a bad check.
Plus don’t forget that in many places the penalty for writing bad checks is not just a stiff cash fine but jail time. The courtrooms and jails are filled with people who wound up there just because they wrote bad checks – and many of them did so not on purpose or because they are crooks, but because they just did not have the money to tide them over until payday.
So cash advance payday loans are unique and they inspire lots of heated debate. If they work for you because of your particular circumstances, then take full advantage of them for your own benefit. On the other hand if they do not suit you because you have other ways to handle your finances and do not need to pay super high rates for the privilege of getting your hands on a short-term loan, then skip them and borrow in a more affordable manner.
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Buying a pre-owned or used car or truck usually means relying upon a loan to finance the big purchase. That is going to be especially true whenever that used vehicle has retained much of its original value thanks to being well taken care of by its first owner. The higher the value of the car, the more likely it is that you’ll need to borrow some or all of the cost to buy it, and that is where pre-owned loans for cars, trucks, SUVs, and other vehicles come to the rescue.
Applying for a pre-owned vehicle loan is a common practice for car buyers across the USA, and because the demand for these particular kinds of loans is so great there are oodles of places that specialize in pre-owned loans. That market for lenders who want to do business with people buying a pre-owned or used vehicle has only grown over the years, and it virtually exploded with the revolutionary advent of the worldwide web and Internet-based banks, loan companies, and other financial services institutions.
To start shopping around for a pre-owned loan or used vehicle loan, experts recommend that you plan ahead and set aside enough time to conduct some research and really check out all of the many options that are going to be available to you. One of the fastest ways to learn about pre-owned loans is to go the Internet and visit sites of large loan brokerage companies. Many of these businesses have access to loans from a variety of different lenders. All you have to do is just plug in the basic information pertaining to your pre-owned vehicle purchase. Then their web sites can do a rapid search for lenders all over the map and give you a fast snapshot of different loan alternatives.
You’ll need to know some data such as the year, make, and model of the vehicle and the price you expect to pay for it. If you are planning to make a down payment or do a trade for your old car as a way to offset the sticker price of the pre-owned you’re buying, then provide lenders with that information, too. Once you have a fundamental idea of what kinds of loans are out there then you can go to other lenders offline – like your local bank or credit union or the finance office of the auto dealership. Compare a few of the better looking deals and soon you’ll start to figure out which of the pre-owned loans is the most attractive based on the important features like the interest rate, the length of time it takes to repay the whole loan, and the total amount of any miscellaneous fees or loan closing costs.
Those pre-owned vehicle loans that are going to be the least expensive are ones that have a lower APR or annual percentage rate – which is the interest rate charged on the outstanding balance. The longer the loan repayment schedule is, the longer it will take to pay it off – so that means you’ll continue to pay over a greater period of time. That automatically adds costs to any loan, because it extends the number of payments of interest that have to be made. So shorter loans that have smaller interest rates are always more advantageous.
Of course there are times when you don’t just want a cheap loan but you want one that is more manageable. In that case you need to consider your trade-offs in terms of the way the pre-owned loan is structured. Extend the payments out an extra year, for instance, and you’ll pay more in the long run but the upside of that equation is that you’ll also have smaller monthly installments to make which will put less pressure on your month-to-month budget and financial picture. Find out the pros and cons of three or four of the best looking loans you see, and then compare and contrast them against one another to see which one suits you and your particular financial situation and need the best.
As you will soon discover – or may have already figured out by now – shopping for a pre-owned loan is not a whole lot different from shopping for a pre-owned car or a slightly used truck You have to pick out the features you want, decide how much those features are worth to you, and then look for the seller who can offer you those things that are most important to you as a buyer.
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Store credit cards and gift cards are among some of the most widely used types of cards. Before using or purchasing them, it is important to learn as much as you can about these cards in order to avoid any surprises.
Store Cards
Store credit cards present a great temptation to many shoppers as they are checking out with their purchases. The sales clerk will often say “If you sign up for our credit card, you can get 10% off of your entire purchase.” In most every case, that savings is not worth it.
Store credit cards charge sky high interest rates, even for those who have very good credit. Also, any applicable fees are usually much higher than with other types of credit cards.
Keeping in mind that credit cards should only be used for emergencies, there is no real reason to have a store card. An exception would be for a store that carries major appliances. Sometimes, stores that carry such items will offer special pricing, but only to those who purchase with a store card.
While it was once fairly easy to obtain a store credit card, many retailers have made the approval process a bit more stringent. This has made it harder for those will shaky credit to obtain store credit cards.
If you are approved, you should work to pay off your balances each month in order to avoid paying interest rates of up to 28.99%.
For those seeking to build or reestablish their credit, store credit cards can aid in that way IF you use them properly. Most stores do report to the three major credit bureaus. In order for the store credit cards to help your score, you should never utilize your entire available credit limit and, as already mentioned, you should pay off your balances in full each month.
Gift Cards
Gift cards are a hugely popular item at many stores. As much as people seem to enjoy giving and receiving them, the stores also enjoy selling them. The reason is that a fairly large percentage of gift cards that are sold will never be redeemed, and that results in pure profit for the store.
Some stores have other ways to help make sure that their gift cards result in extra profits. This is done by charging monthly maintenance fees and placing expiration dates – sometimes as short as six months from the purchase date – on gift cards. While government regulation has cut down on some of these practices, it is important to fully understand all of the details of the gift card that you purchase.
Many stores and restaurants sell gift cards in their own retail space, but a new trend has emerged as of late. That is the ability to buy gift cards to a variety of retail stores and restaurants at your local grocery or drug store.
While this is quite convenient, that convenience does come at a cost. When you purchase a gift card at the store for which the card is issued, there is usually not a fee. When you purchase a gift card at a grocery or drug store, there almost always is a fee. The fee ranges between $4.95 and $8.95. While that may seem small price to pay, on a $50 gift card it is at least 10% of the gift card value.
Another type of gift card is one that features the logo of a major credit card company, such as Visa, MasterCard or American Express. The benefit of this type of card is that they can be used almost anywhere that major credit cards are accepted.
If you purchase a gift card with a Visa, MasterCard or American Express logo from a bank, you will probably not have to pay a fee. If you purchase one from a drug or grocery store, you will have to pay a fee similar to those for the retail and restaurant gift cards.
Both store credit cards and gift cards have their place. When applying for or purchasing such cards, it is important that you fully understand all fees, features and possible expiration dates.
Being well-informed will help ensure that you get the best deal and that you make the most of your store credit or gift card.
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A prepaid credit card is a good option for some people who would like the convenience of being able to use a credit card without having to actually have a credit line approved. While a typical credit is based on a credit limit for which you must be approved, the amount that you can spend with a prepaid credit limit depends on the how much money you have loaded onto the card.
Because there is no actual extension of credit, there is usually not an approval process for owning a prepaid card. This makes the cards particularly attractive to those who, for various reasons, cannot gain approval for a traditional credit card but need to have a card in order to purchase products online, book a hotel room or rent a car.
While you will not have to pay any interest on purchases made with a prepaid credit card, there are often fees associated with them. While the fees will vary based on the provider of the card, they may include monthly service fees as well as a small per transaction fee. You may also be required to keep a minimum balance on the card.
You may also be charged a fee if you attempt to use the card in a way that exceeds the amount of money that is available on the card.
Even taking the fees into consideration, a prepaid card is a good option for many people. If you shop around for the best card and use it carefully, you will likely be able to minimize your fees.
Finding a prepaid card is not difficult. Many banks and credit unions offer some form of prepaid card. They can also be purchased at most check cashing businesses and even at some retail stores. Understand that not all prepaid credit cards are created equally. You should have a full understanding off all of the rules, fees and features before selecting a card.
While most brick and mortar and online retailers will accept a prepaid credit card, there are exceptions. Some businesses will not take a prepaid card for ongoing monthly payments, such as for a gym membership. Some car rental companies also will not accept prepaid cards. If you are thinking about getting one of these cards for such a purpose, you might want to ask the business first to make sure that they will accept the card.
Another limitation when it comes to prepaid cards has to do with your credit rating. Some mistakenly think that a prepaid credit card can help to boost their credit score. The truth is that these cards have no impact on your credit rating.
Because no one is actually extending credit to you, nothing is reported to credit bureaus concerning your prepaid card.
Prepaid credit cards should not be confused with secured credit cards. Secured credit cards are based on an extension of credit, but you secure that loan by keeping an amount of money in a savings account that is equal to your line of credit. You pay interest on what you spend and the transactions are reported to the credit bureaus.
Secured cards function exactly as other traditional credit cards without the limitations one may find with a prepaid card.
While prepaid cards are popular among those with tarnished credit, they can also come in handy for those who do have traditional credit cards. Some use the cards to do their online shopping because then they do not have to worry about their regular credit card account numbers being stolen.
Others choose prepaid credit cards when traveling for much the same reason. They offer the convenience of the card, but if someone does steal the account number, there is not much hassle involved, although you could be out the amount of money that was left on the card.
Parents also sometimes choose prepaid credit cards for their teens to use in the case of emergency. With a set amount of money on the card, there is no chance that the teen could run up unexpected bills.
Prepaid credit cards are a convenient option for many consumers. Be sure to shop around so that you get the best deal on a card with the best features.
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Identity theft is an extremely fast growing crime. A few decades ago, there were only a handful of such cases reported each year. In one recent year, there were nearly 700,000 reported cases of identity theft.
Some people think that the biggest loss to those who suffer from ID theft is what they lose financially. They fail to consider the loss of time and reputation that goes along with it. It can take years to fully restore your financial reputation after suffering an ID theft.
It is so much more than someone just using your credit cards. The person who steals your identity may open new loans and credit cards, apply for jobs and even buy houses and cars. Sometimes such activity goes undetected for years.
Typically it is discovered when the victim tries to buy a home or car and is turned down because their personal credit has been destroyed. Another even scarier thought is that sometimes the thief uses the stolen identity when they have run-ins with the law.
Innocent people have been arrested because there were warrants for their arrest caused by the actions of the person who stole their identity. The onus will be on you to prove you were not the one who committed the crime.
While there are simple steps that you can take to make you less of a target for identity theft, it is important to realize that criminals are usually one step ahead of the game. They have more inventive ways to steal your identity and even some people who have taken all of the suggested precautions have become victims.
The cost of recovering from ID theft can be in the thousands of dollars, and that does not include the time that you lost trying to repair your credit and prove that actions taken by the criminal were not taken by you.
It is a frustrating process made even more maddening by the amount of proof that you must often find a way to furnish in order for someone to believe you. There are, however, ways that you can truly minimize your risk and the headaches should you become a victim.
Consider locking your credit report. When you lock your credit report that means that no one – including you – can access your report for any reason. This action prevents an identity thief from opening any new credit card accounts or making any type of purchases in your name.
However, depending the amount of your personal information that the thief has, he could still use your identity in other ways such as to obtain employment or during encounters with police.
There are identity theft prevention services that you can enroll in. There is a small monthly fee, which varies based on the provider that you choose. The fee includes locking your credit report and monitoring for any unusual activity.
Most also include a benefit that states that if your identity is stolen that they will handle all of the leg work needed to restore your good name. Also, there is usually a dollar amount that you will be reimbursed for any money that you lost as a result of the identity theft.
Here are some other steps that you can take to help ensure that you do not become a victim of identity theft.
- Monitor Your Accounts – Pay attention to your bank account balances and credit card statements. Immediately notify the proper people should you see any unusual activity.
- Go Paperless – Often, identity thieves will steal your mail or rummage through your trash as a way to collect information that they need to steal your identity. Consider canceling all paper bills and statements and instead use electronic versions of these documents.
- Credit Monitoring – Sign up for a service that alerts you anytime there is activity on your credit report. For less than $10 per month, you will be notified via email anytime someone applies for an account or that there is a change in balance on any of your existing accounts.
AS mentioned above, even with the best preventive measures in place, an identity thief can still break through the barriers. By monitoring your financial information, you will at least be able to catch him as soon as he starts which will minimize the amount of damage an identity thief is able to do to your good name.
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