Personal Finance and Investing

Spitfire of ATJ

(32,723 posts) Thu Mar 3, 2016, 02:14 PM Mar 2016

How to get out of the $500 TRAP at those payday loan centers

People tend to borrow the limit of $500 and have to re-borrow every month because they cant afford a $500 hit on their salary.

Here's how I tell people to get out of the $500 a month borrowing cycle. Ask yourself what you CAN afford (I'll use $100 less a month as an example). The next time you go in only borrow $400 instead of $500. The time after that borrow $300, then $200 and then $100. Then don't go back. You are free and clear.

4 replies

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How to get out of the $500 TRAP at those payday loan centers (Original Post) Spitfire of ATJ Mar 2016 OP

They should be outlawed. A HERETIC I AM Mar 2016 #1

Yup MemphisMoocows Mar 2016 #2

Few people can buy a house with cash. Spitfire of ATJ Mar 2016 #3

Some banks are gettign smart Canesfan May 2016 #4

A HERETIC I AM

(24,588 posts)

1. They should be outlawed.

Reply to Spitfire of ATJ (Original post)

Sun Mar 6, 2016, 02:45 PM

Mar 2016

They are the WORST kind of predatory lending with interest rates a loan shark would envy.

Best advice? Don't use one, no matter what. Borrow from friends or family before you even consider walking into one of those places.

MemphisMoocows

(16 posts)

2. Yup

Reply to Spitfire of ATJ (Original post)

Tue Mar 15, 2016, 03:43 PM

Mar 2016

No matter what your income, live below your means and don't buy crap you can't afford. And avoid borrowing money. If you have to borrow to buy something, you can't afford it.

Spitfire of ATJ

(32,723 posts)

3. Few people can buy a house with cash.

Reply to MemphisMoocows (Reply #2)

Tue Mar 15, 2016, 04:14 PM

Mar 2016

Canesfan

(24 posts)

4. Some banks are gettign smart

Reply to Spitfire of ATJ (Original post)

Tue May 3, 2016, 12:22 AM

May 2016

The silver lining here is some banks are getting smart enough to cash in on this market by offering checking overdraft products. They will allow for example an over draft of up to 800.00 and allow the customer to pay the money back over several pay checks. In essence the consumer is given a lien of credit of 800.00 without having to undergo a credit check. While expensive, it's a lot better than the usurious payday loans.

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