Payday Loans – A Double Edged Sword?

Controversial Financial Products.

Every few years a new financial product hits the marketplace and causes a stir between all parties. Credit cards are an accepted addition to modern life now, and it’s not unusual to see a wallet with two or three of them bursting out of the card holder but when they were first introduced and for some time after there was still controversy surrounding its release. The arguments for the use of credit cards were essentially that they allowed people to make purchases and repay the money in the future. The arguments against credit cards were that the interest rates were too high and they would encourage people to get into debt.

The Close Scrutiny Of Credit Cards.

It is not long since payday loans were first introduced and they came under almost identical scrutiny to credit cards. There is no avoiding the fact that the rates are comparatively high, even when compared to those of the credit card, but so do the people who use them as well. Strictly speaking, the charges associated with these two forms of credit are different but fundamentally they can be easily compared to one another.

How Much Does A Payday Loan Cost?

While credit cards attract an annual interest rate of approximately 12%, you are looking at rates a lot higher with payday loans. These rates vary from $10 to $20 for every $100 you borrow usually over a period of two weeks. You are also offered the opportunity to roll the loan over for another period. Of course, you will be charged the same rate as for your initial loan and by rolling a payday loan over too often you will very soon be paying huge rates. Consider that you borrow $1000 and roll the repayment over 5 times. This is not unusual and it means that even at the lowest rate of $10 for every $100 you will have paid a staggering $500 and you will still owe the initial $1000. That’s the equivalent of a 200% APR.

The Questions Raised Over The Legitimacy Of Payday Loans.

Already there is a lot of question over the legitimacy of these loans and regular questions are raised against the ethical question of loan companies offering loans with this kind of charge. Many people who have used them want them stopped because the companies that offer payday loans quite obviously gear their campaign towards the continuing need to roll over the repayment. The companies in question are unlikely to make money from customers who use them legitimately and instead of offering the opportunity to extend the loan as a last resort some companies not only offer the opportunity as a matter of course, but they actually set the extension as default. This means that unless you contact them to inform them you wish to make full payment your loan will extend for another term.

A Solution That Causes More Problems Than It Solves?

Because there are no credit checks required before your are accepted for a loan it is very easy for those who are already in financial difficulty to dig themselves deeper and deeper into a solution that causes more problems than it solves. However, the counter argument is still a fairly strong one. No other financial service is the same as the payday loan, it truly is unique and if you have a short term need for money then the speed and ease in which a payday loan can be arranged is unsurpassed.

The Possible Advantages Of The Payday Loan.

By looking around you are able to borrow as much as $1500 until the date of your next payday and most companies offer the application service entirely online. The application process is one that will take no longer than ten minutes to complete and your application will usually be accepted within an hour. The money itself will be transferred automatically into the bank account you outline in your application and this is the same bank account that your repayment will be taken from on the date of your next payday. If you do have a short term need for financial assistance then the payday loan could be the answer to your problems, but you have been warned; it will cost you a lot of money to keep rolling the loan over.

Christmas Shopping On a Budget

One of the most dreaded events for many people during the holiday season is Christmas shopping. Did you enjoy Christmas as a child, and now hate it as an adult due to what shopping entails around the holidays? Long lines at the check out counter, crowds, high priced items burning a hole in your pocket book is enough to make some people scream until they can’t take it anymore. Well, you can just put your pretty little head to rest, because within this article I have listed various ways to keep within a budget during Christmas shopping this holiday.


First thing is first, what are you going to stuff the stockings hanging over the fireplace with? The best bet on a budget is to buy an assortment of your loved ones’ favorite candy. Along with the candy you can stuff little odds and ends in their stockings this year. Some people tend to make their way to some sort of a dollar market for these particular items. You can find a great selection of items all priced at a dollar. Keep in mind that some dollar markets, pending on which kind, will not sell everything for a dollar or less.


Next we can move on to the bigger gift ideas. Due to our technology these days we may view a movie on a DVD instead of a VHS. DVDs tend to be higher quality. People of all ages will love this sort of gift. Depending on what store you shop in DVDs can be fairly expensive. A good idea is to search around online for websites that sell DVDs at cheap prices. A good online store for DVDs is ‘Deep Discount DVD’. Their DVDs are brand new, plus standard shipping and handling is free. You may also try auction websites. A lot of times people will sell DVDs brand new, factory sealed for a much less price than if you were to purchase it in a store. You can search for almost anything on an auction website. The items being sold on these particular sites will be either used or new. Whether or not a certain item is used or new should be located within the description about the item being sold.


Outlet malls! Yes, you heard me correctly. Outlet malls are another great way to shop. Usually you can come across some of your top name brand stores here, and the prices on items are much less. If the prices aren’t much less then usually the store will hold more sales in it. Think I’m kidding? If you do then stop by an outlet mall before the holiday season is up and see for yourself with your own eyes. Usually around the holiday season is when you can find some great deals at various outlet malls.


What about the shopper who hates malls? That one is almost too easy to answer. As long as you have a computer and internet access then you’re good to go, but if you don’t then you’ll just have to deal with the horrid shopping crowds of the holiday season. Your best bet would be to start searching for whatever items you are looking for on Google, or some other search engine found on the internet. From there you should run across a few nice online stores. A good idea is to place ‘discount’ in with your key words. For example: ‘discount DVD’ or ‘discount action DVD’ or ‘discount charm bracelets’. There are many different ways to word what you are looking for so just use your best judgment.


Those are just a few ways of trying to keep Christmas shopping inexpensive. Keep your eye out while you’re shopping. You never know what clearance racks you may come into contact with that may make great gifts this year!

Prevent Your Student Loans from Becoming Default

Many people don’t have the funds to attend college. Fortunately, the government provides student loans to many individuals who would otherwise not have the opportunity to attend colleges and universities. This comes in especially handy since education costs continue to rise.

Although, student loans are blessing for many individuals and their families, they can also be a curse. At the time that most individuals are entering college they are young and new at managing their finances. Many individuals aren’t familiar with debts, credit, and budgeting.

Yet, this is debt is usually very substantial compared to any debts they have had up to this point. In addition, these debts are taken much more seriously because they are backed by the government. This creates a situation where young individuals can have their credits tarnished for a very long time. They may also experience garnishments, tax liens, and other collection efforts. Unlike other debts, these government debts may not be dismissed even with a bankruptcy.

However, student loans do not have to ruin your future. There are many options for an individual whose student loans are facing default. Deferment, consolidation, and extended repayment plans are available. Many times, these options will prevent a borrower from defaulting on their student loans and help them weather the storm.

A deferment is when a borrower is allowed to stop paying on their student loan for a specific period of time. This may be a deferment of one payment of may be a deferment of a year or more. The balance of the loan remains and interest may accrue during this time, but it won’t tarnish your credit or start collection procedures.

If you can pay some of your loan payments but are having trouble with the amount of the payments, you may want to extend the payment of your loan. This will reduce the monthly amount of the loan. However, it is going to extend the amount of time you will be paying off the loan and may increase the total amount because of interest costs.

Deferments are available for a number of circumstances. You can get a deferment if you are unemployed, experiencing hardship or attending school full-time. To obtain a deferment you must apply for a deferment through the company that has your loan. There may be certain requirements and documentation that you must complete and turn in to receive the deferment, but they will help you with these steps.

If you have more than one loan and are finding it difficult to keep track of it all, than a consolidation loan may be right for you. A consolidation loan is a when a company purchases your loans from each of the institutions you owe. You than that one company one payment a month based on the amount of the loans and the interest that company charges.

When consolidating your loans, you want to shop around. There are a great deal of loan companies that prey on individuals who are facing debt. The amount of interest and the amount of time you are going to have to pay on the loan may vary widely from one company to the next. Pay close attention to the terms of the loan and get quotes from a few different companies before you decide on one.

If you are facing default on your student loans, the best thing to do is contact your loan company. The earlier you figure things out the less it will cost you in the long run. These types of loans don’t go away and only get worse with time. Don’t be afraid to talk with them your loan, they benefit from finding the right loan terms for you because something is better than nothing.

Stopping the Cycle: Conquering Credit Card Debt

Removing debt from your life is a hot topic these days, and it seems that everyone has a take on how to do it. Well, I am no different that any other entrepreneur or writer—because I too have some sound suggestions on avoiding and consolidating debt. These adages should be taken as they are intended—light hearted, without judgment, but stemming from experience. My experience with debt has been tumultuous at best, and the lessons that I have learned are common to many others. These lessons should be passed on, discussed, laughed at, scorned, and even applied to your own debt management process.

For starters, never sign up for a credit card just to get the free CD, tee-shirt, book, gift certificate, etc. The old saying that “nothing is free” rings true in these cases. These deals are always what they seem—to good to be true. That is because frequently credit cards marketed to groups that will sign up for them for the freebies (i.e. college students) hold high interest rates, poor customer service, and horrendously high late fees. These companies make their money of young and wary consumers, and they merely pave the way for continued credit card debt downfalls.

Secondly, never fall into the cycle of obtaining another credit card to merge balances. Yes, sometimes this debt technique might be beneficial, but usually you will continue to spend and rack up more debt on the new card. For instance, let’s say that you get a new card, interest free for a year, with an eight thousand dollar limit. From here, you merge three high interest credit cards onto the card for a total balance of seven thousand. Now you’ve promptly shredded and destroyed the old cards, and you are diligent at not adding new debt the eight thousand dollar limit card. But, what you didn’t account for is that once you start to decrease your bill the credit card company after several months of continuous and timely payments “graciously” increases your limit to ten thousand. So now, you have five thousand dollars in credit card debt with five thousand to “spend.” The weather is cold, there is three feet of snow on the ground, and you have twenty vacation days that you need to use or they will be lost. So you and two friends decide to whimsically take off to Tahiti for two weeks because you found a hot deal for less than a thousand dollars. In your winter stricken head you are saying, “Oh I’ve done so good so far. I’ll just make double payments when I get back.” In literally, the blink of an instant you have gone from diligent consumer to typical statistic. This scenario is only one of many that will prevent you from paying off that debt. Having a credit card with a “leftover” balance is like waving a steak in front of a hungry dog—the animal, no matter how well trained, will dive in and devour the temptation. More importantly, even low end interests rates continually add to your overall credit card bill. Generally, credit card debt takes ten to twenty years to pay off by using the minimum monthly payment schedule.

Hence, the only sure fire way to reduce your credit card debit is to remove the cards from your wallet and spending power. Using a debt consolidation service is an excellent way to do this. These services, plentiful and helpful, generally secure reduced or no interest fees on your cards, and they charge a minimal fee for their services. Additionally, your overall payments are almost always reduced, they work with you to develop a long term payoff plan (particularly one that will fit your budgetary needs), and your credit rating will improve with service to the program. The debt services that I have talked with all interview their clients, call two to three times a year for service updates and to check in with the customer, and monthly statements continually give you a sense of satisfaction because they reflect your continually reduced balances. The money that you pay to the service goes to your primary balances, and little if any if it is applied to interest accrual because interest rates are severely cut with the program. Lastly, debt payment programs prevent you from using the cards while in their care, prohibit you from applying for new credit until your current debt is paid off, and they make automated payments painless and simple. Once a month, like clockwork, a withdrawal will be made from your account into theirs. Then they will disburse the money to the appropriate companies, and you are worry free. For even more encouragement about the benefits of debt management programs, you should consider that for a standard credit card debt of five thousand dollars a debt service can secure your payoff in three and half to five years from your start date. That, right there, is a huge advantage over the ten to twenty years of payments through the credit card companies themselves.

Finally, removing credit cards from your life may make you cringe and loath the thought of not being able to shop on the weekly basis, but you can still shop and enjoy vacations and the finer points of life without a credit card. Most banks offer free debit cards with checking accounts, and these apparatuses work like standard credit cards. Also, be diligent and save a percentage of your weekly wages for your own pleasure. These “earmarked” wages should not be for your savings account, which is also a good idea (even if you only put in twenty dollars a month).

These “earmarked” wages are those that you can use to go splurge on pieces of a new wardrobe, go see the hottest summer concert, or use for vacation funds. Initially, you may have to take a month or two off from weekly (or daily) shopping excursions, but after you have your watering hole fund established you will be set. From then on, you will be able to spend freely and without guilt because you will know that this money is yours and does not have to paid back at the end of the month.

Dressing Kids in Style on a Budget

Money gets tight sometimes when you have several children. Diapers, formula, vitamins, doctor visits, and shoes for growing feet all add up fast! However you can still make your kids look like a million bucks—without spending it.

Probably the most well-known tip would be to shop a season ahead. Why pay $25 for a long sleeved Nike sweatshirt when you can buy it on a post-season clearance rack for $12 or less? Don’t buy a coat in the fall for $60…shop ahead and get it in the spring for $30 or even less. One year I found an $80 Nike coat for only $19.99, and another year I purchased a $40 winter coat for $8 at Sears. The best part is, as your children grow, you will already have some things in the back of their closet that fit them, rather than having to make a mad dash to the mall.

Another tip would be to buy brand-name items. You might feel like you are saving money by buying clothing at Walmart, but once the clothing shrinks a size in the dryer and wears thin with use, it often cannot be handed down to other siblings. Also the shrinkage does not allow for much growing room. However brands such as OshKosh, Nike, Carters, Levi, Children’s Place, etc. usually do not shrink and they maintain their fresh looks wash after wash. It is more economical to buy a $12 shirt that lasts through three little boys than to buy a $5 shirt that has to be trashed after one boy! You can even get the name brand items cheaply by checking outlet stores and even Goodwill or Salvation Army. I recently found a Ralph Lauren denim jacket, still with that starchy new feel to it, at a Salvation Army store for only $6.

Another place to find great deals on kids clothes is Sam’s Club. I have found kids Levi’s on clearance for $6 each and they regularly carry Carters blanket sleepers for infants and toddlers for only about $6.50. They do not carry a lot of clothes at one time, but what they do carry is always name brand (sometimes high end brands as well) and it’s always at an outstanding price.

With a little foresight and a bit of extra time, you can be assured that your kids are dressed in quality apparel…without a large quantity of cash!

Practical Ways to Reduce Your Gas Bill This Winter

We're used to cranking up the thermostat once fall weather arrives. But this practice is becoming increasingly less affordable with the constant increase in gas prices. Making your natural gas bill more affordable is easy. At first the changes you make might seem like a sacrifice, but gradually these small sacrifices will add up in the amount of significant savings each month.

As the weather becomes colder, instead of turning on your heat at the first chilly breeze, allow your body to adjust to the dropping temperatures. Get out a warm comforter for your bed or layer blankets--you'll probably find that in the early months of fall and winter you won't even have to adjust the thermostat at night because the layered blankets will trap the body heat you will radiate.

Wearing warm clothing inside is also a good tip. Your house doesn't have to be a sauna to be inhabitable. Throw on a comfortable sweater or sweatshirt and get a nice pair of slippers or some soft socks. Throws or blankets on your couch will make relaxing in front of the television cozy.

Keep a teapot and a stock of your favorite teas. Drinking warm beverages can easily cause you to break out into a sweat when you're feeling shivery. ( Besides being available in different flavors, caffeine contents, and qualities, tea is undeniably good for you; it is packed with antioxidants, is heart healthy, and even contains fluoride.)

It may not be pretty, but covering your windows with plastic can greatly reduce the heat loss that occurs because of poorly sealing or older windows. Kits that come with everything you need are available. They are simple to put up and easy to take down at the approach of spring. Heavy drapes will greatly decrease heat transfer through inefficient windows. You can also place rolled towels at the crack at the bottom of the door, eliminating drafts.

In the kitchen, after doing holiday baking, don't waste the heat produced by the oven after you have shut it off! Open the oven door slightly (making sure that no pets or children are in the area--this can be dangerous) and let that heat escape into your house.

As the weather gets cooler, space heaters can be an economical way to warm the space you're in rather than forcing you to warm the whole house. For example, why run the heat at full blast when you spent most of the time in your study? Space heaters can be found that do not pose the same safety hazards associated with older space heater models. They are compact, highly portable, and built so that even a towel draped over them is not a risk for fire.

If you have a wood burning fireplace, this may be a viable source for heat. Depending upon your natural gas usage, it may be cheaper than heating your house solely with gas. Fireplaces require maintenance and a constant supply of wood, but the relative inconvenience may be cost-effective.

As you can see, keeping your gas bills from getting out of control takes only a little effort on your part. If you can't afford new windows, new insulation, or a new heater (or you would still like to keep your bills to a minimum, even with these higher-cost cold-weather solutions), lowering your gas usage and adopting an energy conscientious life style can be financially rewarding!

Drive your man insane! Inventory your kitchen!

A humorous look at one family’s adjustment to a money saving technique
How does a family of five live on $100.00 a week for groceries? With a kitchen inventory, of course! You may be surprised at how well you and your entire family adjusts.
This article includes a downloadable excel document to help a person begin to inventory their kitchen.

With gas prices rising, so does the price of everything else, including food and supplies for the home. Toss in the fact that many of us return to the store multiple times a week for a single item, and that those small, quick trips always turn into large hauls; it is just too costly to shop anymore. We had to find a solution.

My husband is awesome. He brings home the bacon and sometimes fries it, too. Although we both agree that we are happy with me as the main cook, he dabbles a bit in the kitchen. And quite successfully, I might add. However, since I began to try to actively save money a few things have changed in the kitchen, and they are driving him nutz. This is fun!

The first thing any sane person does to save money is to start a budget. To start a budget we have to honestly lay out all of our income and all of our debts. Take it from me, this will be very painful! This usually takes three or four tries because the honesty factor depresses most of us. Once we have that budget down, we also go through a moment of disbelief as to how much we spend on different items, or on different needs. For us, this epiphany came when we looked at what we were spending on groceries.

Now, I define groceries as anything you would buy on a typical grocery store run. This includes food items as well as things such as garbage bags, toiletries and laundry items.

At the time we finalized our budget, we were spending an average of $1,000.00 a month on groceries! Yea, a GRAND! That adds up to $12,000.00 a year. Or to put it bluntly, a NEW CAR! Hello? This was unacceptable. Some people do not even make that much money in a single year, much less spend that much to eat. Something had to change.

So, I came up with an arbitrary number of $100 a week. Why $100? It was a starting point, a stab in the dark, because money-wise that is where I am, in the dark. The plan is to see if we can live reasonably on $100 a week on groceries with out social services paying us a visit to check on our children. So far, we have done quite well!

To further reinforce this ideal budget of $100 a week, I popped open the excel program and laid out an extensive inventory of all the items in our kitchen, the pantry, fridge, bathrooms and laundry area. I saved the original as the main, and printed out one copy. I took this copy (Three Sheets!) and went to work.

It took me two days to completely inventory everything we had. Who knew we would have 9 cans of kidney beans stashed away? I also found 12 cans (yes twelve cans) of something without a label. There was no telling what it was or how long it had been there. I didn’t have the guts to open it. The mystery cans were thrown away.

Here is how we used to do it. We would sit at the table with a pen and paper and try to remember what we need, inevitably forgetting the one thing we were headed to the store in the first place. Giving up on the list, or forgetting it in the car was our usual mode of operation. This is why, when we get to the checkout stand, we end up with more in our cart than we budgeted for. “Did we need any of these?” “Who knows! They were on sale, so I got them!” Now I understand how the 9 cans of kidney beans got there.

Once I knew what we did and did not have, I could more efficiently shop for the "Holes in the Inventory". This left no room for "Guessing" what we needed when making a list.

Now, if you have a home inventory (Think Restaurant) then you will only need to grab the inventory off the wall or clipboard and "Fill in the Holes"! This is working for us so well, that last week I only spent $41.59 in total groceries for the week! And there was no going back to the store for one or two things, if we ran out. We simply toughed it out and re adjusted our inventory list.


Now, my husband was informed about this list. "When you use something, mark it off on the inventory list!", I told him. Did he listen? Well, sort of. He thought it was a great idea, but he found it cumbersome to work with. When he cooks, he never “Fixes” anything for dinner, he “Mixes” something for dinner. This means, he puts a pot on the stove and simply begins to throw odd things into it until it smells good. No one for thinking about what he is doing, he made an incredibly delicious dinner for all of us but could not remember how much of what he may have used. So, I asked him to try to recount what he put in his design.

After he finished with his rant about how “You cannot inventory art.”, I mentioned that I could shave $600.00 off our monthly grocery bill. It was quiet for so long, I thought time had frozen. He immediately turned around, grabbed some paper and began recounting what he used to mix his meal.

As I walked off, he reminded me smugly, “This doesn’t mean I agree, you know!” “Yes it does!”, I said under my breath giggling as I walked away.

I placed the list on the wall with a pen tied to the wall to leave no room for excuses. While mixing another one of his famous "Specials" made of noodles, tomato sauce and anything loose in the kitchen, I was hovering over him asking, "Did you mark that off? What about those? Did you get those?”, and so on. He became so frustrated, he walked out of the kitchen, turned back towards the kitchen, glaring at me and told me to, "CHECK THE INVENTORY!” So I did....

It was beautiful! He had marked off how many noodles (Ounces) he used, including how many cups of milk, or slices of bread. Whooo Hoooo! I walked out of the kitchen asking him, "Would you like me to prepare the table for you, Chef?" Now he is the one who hovers over me, asking, "Did you mark those off?" And at $41.59 for the week’s grocery bill, how can we argue? This is fun!