Written by Charlotte Wood (last updated August 18, 2017)
I completely understand the mentality of needing your paycheck before your payday. It's a stressful feeling and one to be avoided if possible, however heading over to a payday loan company is not the solution. Those companies charge you exorbitant fees and you run the risk of getting into greater debt. Payday loan companies are at the edge of slippery financial slopes that can be difficult to get back on top of. They're just not worth it.
What payday loan companies basically do is give you an advance on your paycheck, except that they charge you outrageous fees for doing so. When you go into one of these establishments you postdate a check for the amount you want advanced, plus a fee. They give you the cash and when the date comes the company cashes the check.
The consumer trap this appeals to is simple: Get people to spend money they don't really have and pay a hefty price for it. Payday loan companies are supposedly convenient but tend to trap people in a never-ending spiral of debt. Working as a bank teller for two years I saw dozens and dozens and dozens of people from payday loan companies trying to cash bad checks and the people who owed them money didn't have a cent themselves. It was always going on and was never worth it.
The best way to avoid payday loan companies is to budget your money so you don't ever spend money you don't have. If you have to negotiate with your creditors or borrow some quick cash from a family member then do it before you go to a payday loan establishment. If you show an active interest and responsibility regarding your bills, companies will notice that and will most likely hear you out. If you do borrow money from a family member or friend however, pay them back as soon as possible and don't ever borrow more than you need.
If you are chronically short on cash, if your payday never seems to conveniently coincide with your due dates, you can consider taking out a small, low-fee credit card to bridge the gap. Once again, however, don't spend more than you have. If you can't pay back your credit card bill then don't spend that money in the first place. You don't want payday loans to dig you a debt hole, so don't allow credit card debt to blight your credit.
The best way to avoid payday loans is as simple as that: avoid them. There are other alternatives and the best way to eliminate the need is to budget your money and spend only what you have. If you don't know how to wisely budget your money then look into credit counseling or seeing a financial advisor. Whatever your financial state though, payday loans are never worth it!
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