Is The Use Of Pay Day Loans Wise

Is the​ Use Of Pay Day Loans Wise?
Could pay day loans be the​ answer consumers with low bank accounts have been looking for? is​ there any harm in​ using these services? Aren't they better than using credit cards or​ going hungry?
You've seen the​ commercials .​
Cute characters promise financial prosperity .​
Happy,​ professional individuals appear to​ regularly visit their corner pay day loan shop as​ proudly as​ cashing a​ check at​ the​ bank .​
Customers at​ the​ grocery store all recommend pay day loans as​ the​ easy solution for a​ lack of​ funds.
Some individuals reason that paying a​ bill with borrowed money is​ better than receiving bad credit marks because of​ not paying the​ bill .​
This is​ understandable .​
However,​ some financial institutions are willing to​ make the​ occasional exception if​ contacted about the​ situation .​
Or there may be a​ small fee,​ but not a​ credit report made.
Using it​ for groceries or​ other items? Consider the​ true cost before making a​ decision .​
Compare the​ cost of​ using a​ pay day (or cash advance) loan to​ the​ fees charged for taking a​ cash advance on​ your own credit card .​
Can family help? Often those who are forced to​ use pay day loans are not able to​ repay the​ loan by the​ next pay check and that can lead to​ a​ cycle of​ debt and stress.
WHAT is​ the​ COST?
Several sources,​ including a​ consumer report by the​ FTC (Federal Trade Commission) and the​ CFA (Consumer Federation of​ America) state that the​ usual APR is​ between 350 - 650% with some as​ high as​ 780%!
A loan of​ $100 ranges in​ cost between $15 - $30 .​
If the​ loan is​ not repaid by the​ pay date then it​ can be renewed with another fee due at​ each renewal .​
a​ loan of​ $100 can cost $60 in​ fees after 3 renewals.
Based on​ the​ warnings issued by federal and consumer organizations it​ is​ clear that using pay day loans or​ cash advances from these businesses can often lead to​ more debt and problems .​
Some sites were reported to​ automatically roll over the​ loan and only withdraw the​ renewal fee on​ the​ pay date .​
Other sites surveyed by the​ CFA required customers to​ agree in​ contract to​ not participate in​ class action suits or​ to​ file for bankruptcy.
For those who are having debt problems it​ is​ recommended to​ seek no- or​ low-cost credit counseling from a​ local non-profit organization .​
These organizations can help with reducing current interest charges and lowering monthly payments .​
If the​ problem is​ budget,​ you​ should look to​ a​ financial planner who can help you​ to​ manage the​ money you​ do have and avoid using credit at​ all.

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