Is the ease of a payday loan online or store front location, keeping customers from cutting back on expenses? The payday loan industry has a bad reputation for targeting certain customers to fall into the “payday loan trap” but customers are trapping themselves when using a payday loan as a first option for cash. High interest loans are last resort cash options for those times when all other options have been exhausted.
Payday loans are often described as fast loans which will get the customer money to cover an emergency cost; a car repair, a dentist visit, to a pay a prescription. If a borrower uses these loans on an emergency occasion, there would not all the bad reports about people’s finances going under because of the so-called payday trap. Many customers will return to the payday lender up to eight times a year unless their state regulated a cap on how many terms are allowed per year.
Many customers who frequently use payday loans are using them to pay for recurring expenses. Utilities, groceries, credit card bills return each month and high interest loans are making the payments. A big problem with this kind of activity is that all the extra money which is being spent on fees and interest for these payday loans could be used to pay off other debt.
What other options are there besides a payday loan?
One of the best ways to cut down on bills is to cut expenses. Budgeting strategies can help an individual lower the immediate cash demand on their paycheck. Even if the cutbacks are temporary, the savings to be had can be used to pay down on debt or save for future emergency situations. Grocery costs are one of the leading budget breakers for families of all income levels. Purchase less pre-made or individually packaged items to lower costs. Coupons also provide a great savings. Don’t purchase items which are full priced, wait and hold back on your purchase for a good sale.
- You could use credit cards
- Cut back on home extras; movies, cable, cell phone
- Hold a garage sale
- Borrow from a friend or family member
- Pawn shop
- Car title loan
- Bank loan
- Roll the coins in the house
Some of these options may not be practical for all situations, but neither is a payday loan. It is one options out of many. The best way to solve your money problem is to get to the root of it. Why are the credit cards filled? How come my utility payments are so high each month? Some problems may be the individual’s bad habit or maybe it is overlooking charges which were not authorized.
When it is a case of someone not able to afford only the basics, there is help out there. Free credit counseling services, community groups, or even church donations are resources which can be sued by those who are in desperate need. Payday loans do provide quick cash in a pinch and the animosity behind the loan is attractive to many. The down side of these loans is that they must be paid back quickly, and for those with stressed income, it ends up being a poor solution.
