Are Payday Loans The Fast Food of Credit?

Payday loans can be tempting. Like fast food they offer a quick fix at the expense of your health.

Do you think 13% to 29% credit card and traditional loan interest rates are outrageous? Consumers are charged on average between 200% and 500% APR for payday loans.

On top of that, consumers who use payday loans are very likely to fall even further behind and end up on a payday loan treadmill. The cycle starts when consumers get a new payday loan to pay off other payday loans. Like the calories contained in fast food, the ever increasing number of loans has a way of building up, making the debt almost impossible to work off.

Some alternatives to payday loans include:

  • Contact your creditors and request temporary extended due dates.
  • Increase your income.
  • Borrow from family or friends.
  • Immediately decrease your monthly expenses like cable, groceries, entertainment.
  • Pay with your lowest-rate credit card.
  • Investigate a debt management plan with a credit counseling agency to see if you can reduce your monthly payments.

Clearpoint has been helping consumers with their personal finance goals and debt repayment strategies since 1964. Today, we work with consumers all over the country through counseling that is administered online, in person or over the phone. Learn about our services today!

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