Wednesday, July 11, 2007

Payday Advances

Want to hear one of the worst things you can get yourself involved in financially! Payday advances and yes I’m speaking from experience to the tune of approx. $600 a month in interest alone! Did I fall for their great commercials of everyone needs some help sometimes or easy way to get money before payday, no absolutely not. Unfortunately we all fall behind every now and then but if you have any other way either family, credit card or even friends that could loan you the money till payday you’ll be that much further ahead.

Here’s how the routine works you simply fall behind say $100 you need for gas to get to work for the week, you walk into one of these very friendly places with no credit check needed. Provide them some references, pay stub, bill from home, a check and your bank statement and they’ll be more than happy to loan you the money till your next payday at a cost of anywhere from $15 for two weeks up to as much as $45 depending on which company, some will even be kind enough to give you there branded debit card to which they will charge you for the card as well as charge you a couple extra bucks just to ensure that it will cover the convenience charge when you go to the bank machine to withdraw your much needed money.

Now most people will look and go hey no big deal an extra $15-$45 bucks to get the cash I need now, no problem. Here’s the problem they tell you if you need to (which they already know you will) get another advance all you’ll need is you most current pay stub and another bank statement, now your sitting there now going ya right this is a one time deal I won’t be back! Guess what your paycheck rolls around next time and your short that extra $145 oh man I have the mortgage to pay, car loan, hydro and the phone bill came in. Guess who’s coming back you’ll find that somehow it just keeps mounting and mounting and before you know it, it seems like there is no way out unless you can somehow get some large lump sum of extra cash.

Really the only way out is either a lump sum or to gradually work down the debt which can be very difficult if you’re overextended. There simply there to take advantage as it’s basically a legal form of loan sharking to which the Government of Canada states that the interest cannot exceed 60%. Many have found their way around this by claiming broker fees for finding the money, charging you for the card mentioned earlier, even charging you a debit fee for when you come back to pay the money you owe if you use your debit card to pay off the debt. Of significant note there currently is a pending class action lawsuit facing Money Mart in several provinces.

I would highly suggest if there is anyway possible that you can make it to your payday without taking an advance from one of these places it most certainly is the way to go. Sometimes as was in our case you have no other alternative, try to pay it off as quickly as possible otherwise you find yourself digging deeper and deeper in debt.

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