Mayday to Payday: Why One Woman Loves–Or At Least Kind of Sometimes Likes–Payday Loans
Author: Nick
Category: Money
Topics: lending
Photo by Stephen Witherden
By Valerie March
Okay, okay–I get it. Payday loans (or cash advance loans) are bad news.
The short-term advances are horrendously expensive. They take advantage of young, poor and undereducated people. They often trap users in an endless cycle of debt by allowing people to borrow money they can’t pay back, thus “flipping” the loan for ever-increasing interest rates, sometimes as much as 800%. They cause much suffering and despair. Payday loans kill pretty flowers and hurt innocent kittens.
Roger that. I concede. I’m waving the white flag.
But hear me out–when you’re desperate, payday loans can provide a relatively attractive alternative by heading off even worse financial woes, especially if you enter with your eyes wide open.
As a semi-professional financial screw-up, I’ve never been particularly vigilant about balancing a checkbook or keeping receipts–I figure my cooking skills, sparkling personality, and kick-ass karaoke version of “Hit Me With Your Best Shot” more than make up for this character flaw.
But, a little more recently than I’d like to admit, I realized I had written a $200 outstanding check with only $100 in my checking account. Savings? Ha. Good one. I also had no credit left on any of my cards for a cash advance, and payday (as well as the nearest plasma bank) seemed a million miles away.
I had four choices:
- Let the check bounce and assume the risk of it being returned, only to rack up fees, credit damage and embarrassment.
- Let the check bounce and pray that my bank would cover it anyway, which means I would incur the $35 fee that my bank assesses and an icky mark on my credit.
- Auction off my kidney. Probably the left one.
- Or I could discretely and easily… take out a payday loan.
I can hear your horrified gasps. Everybody just calm down. Let’s look at this rationally.
A short-term loan would cost me a mere $21 for the $100 I needed to borrow, and it would make its way into my account the next day, thus saving me the credit blemish. (Note: The fees vary for each loan provider and depend on your personal financial status. Be sure to shop around for the lowest rate and don’t hesitate to tell competitors about lower offers to see if they can at least match or beat them.)
See what I’m saying here? Yes–I should have kept a better eye on my balance, I should have kept my credit lines in check, and I should have had savings.
But I didn’t, so when the cash cow runs dry, problem-solving people like me turn to the cash sheep or cash goat (I’ve even been so low before as to look to the cash hamster).
Now, make no mistake: I am not advocating cash advances as a way to live. Routinely getting payday loans is a bad, bad idea… but, when used strategically, they can be a powerful weapon in any financially irresponsible person’s arsenal.
Until I reach the point of fiscal righteousness, I vow to make even the bad decisions in a best possible way and save my kidney for when I really need it–like when the Fender FR-50CE Resonator Sunburst goes on sale.
(5 votes, average: 4.00 out of 5)
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By day, Valerie March is an assistant editor at a financial publisher that offers investing advisory services. (Yep. Not kidding.) By night, she is an aspiring singer/songwriter. Valerie has been saving, rather unsuccessfully, to buy a new guitar for a long, long time. You can check out her and her music out at www.valeriemarch.com.
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19 Responses »
1.
Sue
August 2nd, 2007 at 8:42 pm
Been there, done that, and have the t-shirt.
About a year ago my employer decided to only pay me for 4 hours of the 44 that I worked. This was a problem since I was to be paid on the 30th and the bulk of this money would go towards rent. Since I have direct deposit, they spent the better part of a day monkeying around and trying to figure out what went wrong and what to do. Finally they decided I was right and provided me with a paper check. I rushed down to the bank moments before they closed and deposited the check.
Next morning, I get up and the check hasn’t cleared. I called the bank and found out that the check was drawn on an out state/out of region account and would need 5-7 business days to clear. At this point my employer let me know this was no longer their problem as they gave me a check.
Since I was in credit counseling (just finished last month), I had no credit cards to take a cash advance against and I knew I wouldn’t qualify for a quickie bank loan. Asking friends or family was out of the question (for a variety of personal reasons) and my poor savings account had been ravaged from refilling my prescriptions (I takes lots of them, do it through the mail order to maximize, FSA which I max out in two minutes).
I really felt like I had no choice. It was either payday loan or face late fees for paying rent late, more negative info on the credit report, and possible eviction. So, I dug around on the net and found a payday lender. The process wasn’t too horrible and I made sure I got the best rate possible and would not incur fees for paying off the loan early (you’d be amazed). That $400 loan saved my behind and the minute my paycheck cleared (five days after my rent check cleared), I paid off the loan early and therefore saved moola on the interest.
For the situation I was in it was the best solution at the time.
2.
mapgirl
August 3rd, 2007 at 5:45 pm
Dude. That is a goat, not a cow.
3.
ncsu95
August 14th, 2007 at 8:25 pm
Here’s an idea….how about get on a written budget where you spend every single dime you make on paper with a purpose before you spend a dime. Then live by that budget no matter what. You know what will happen if you do that? You won’t have the possibility of bouncing a check. Also, you’ll be amazed at how much further your money goes. Bouncing a check is one of the stupidest financial mistakes you can ever make…payday loans are about equal.
4.
Online Auctions
November 8th, 2007 at 10:44 am
I believe that the best thing to do is to save up in case of… Yes a mere 5$ a week can save your ass in a few months. It’s not allot or hard just cut back on cigarettes or a few beers every week. It’s not that hard and when your stuck in a hard place then you can pull out money. It can be done ppl.
5.
Fast Cash Advance
May 31st, 2009 at 7:02 pm
We just wanted to inform you that we completely agree with what you wrote regarding this topic. Yes, payday loans are a necessary evil and they can be a complete lifesaver. It seems everybody has forgotten about the $35 bounced check fee for a 1 dollar pack of gum you might have bought. Now that seems excessive.
6.
Student Loans Without Cosigner
December 18th, 2010 at 9:39 pm
A short-term loan would cost me a mere $21 for the $100 I needed to borrow, and it would make its way into my account the next day, thus saving me the credit blemish. (Note: The fees vary for each loan provider and depend on your personal financial status. Be sure to shop around for the lowest rate and don’t hesitate to tell competitors about lower offers to see if they can at least match or beat them.)
7.
ملتقى صبايا العرب
March 26th, 2011 at 9:48 am
I believe that the best thing to do is to save up in case of… Yes a mere 5$ a week can save your ass in a few months. It’s not allot or hard just cut back on cigarettes or a few beers every week. It’s not that hard and when your stuck in a hard place then you can pull out money. It can be done ppl.صبايا العرب
8.
Hemorrhoids
May 19th, 2011 at 11:46 pm
Maybe you should just be better with money so you don’t have to worry about this in the first place.
9.
jocu-RI cu Masini
June 22nd, 2011 at 5:57 am
Great picture, I wonder how you manage to come up with this things!?
10.
دردشة
July 5th, 2011 at 11:58 pm
thank you man a lot’s
11.
jocu-RI cu Masini
September 3rd, 2011 at 12:39 pm
Great one again dude, I really like what you are writing about
12.
شات مصر
September 15th, 2011 at 4:31 pm
This article is already excellent and worthy of appreciation and praise
13.
jocu-RI cu Masini
November 1st, 2011 at 10:40 am
I can’t stop laughing at your great jokes man and your drawings are awesome too
14.
jocu-RI cu Masini
December 1st, 2011 at 5:24 am
Impressive you managed to turn something about money into something funny
15.
دردشة عراق الرومانسية
December 23rd, 2011 at 11:36 am
thank you a lot’s bro
16.
jocu-RI cu Masini
January 3rd, 2012 at 9:22 am
Great article as usual, I know that this is a problem for everybody but I still can’t stop laughing
17.
شات
January 28th, 2012 at 7:51 am
thanx this topic very very good
i will spend my time in this site
18.
jocu-RI cu Masini
February 1st, 2012 at 9:09 am
I want more drawings from your and also more articles, everything is very funny
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[...] the weekend I stumbled across a blog post over at PunnyMoney called Mayday to Payday: Why One Woman Loves – Or at Least Sometimes Likes – Payday Loans. If this was a satire post, then I might have been able to stomach it…but the guest author [...]
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