San Diego, CA. “For many workers, a cracked tooth
will just have to ache. To others, it sounds like $100-$150 for the
dentist they don't have and this is one of the reasons ‘Hold-A-Check’ and
other ‘payday loans’ are so popular,” says the nonprofit Institute of
Consumer Financial Education (ICFE), a San Diego based group helping
consumers become better spenders, regular savers and wise users of credit.
“Payday loans are advertised as solutions for short-term money problems,”
said Richard, who added, “Most consumers would be better off to avoid,
these loans all together. Payday loans are offered at an estimated 5,000
to 6,000 storefronts nationwide and the average loan is about $200,”
Richard said. To obtain a payday loan, the borrower either writes a
postdated check for the amount of the loan plus a fee and, in return, gets
the loan amount immediately in cash or assigns their pay checks to the
lender via electronic funds transfers.
“Payday loans, also known as cash advances, check loans, hold-a-check and
payroll advance loans. They may be convenient, but they are VERY
expensive. To borrow $200 for two weeks, you could be charged $36 or more,
and while $36 might not sound like very much, it works out to an annual
percentage rate of over 400 percent. The money merry-go-round starts when
the borrower begins advancing from one payday loan to another,” Richard
explained.
If you are on a money merry-go-round with payday loans, here are some
steps to take to get off:
-
Scrutinize everyday spending, gather receipts, look for
dangerous trends of regular convenience purchases and look for ways to
achieve additional spending value of your dollars. A good target is 10-20
percent
-
Set aside the savings you accumulate until you have enough
to satisfy the payday loans.
-
Establish a written plan for your income and outgo.
-
Either begin or take greater advantage of household and
grocery item coupons because about 30 cents of every take home dollars go
to this area.
Before rushing into a payday loan, be sure to check out
your other options. If you have a credit card, it may be less expensive to
charge the unexpected expense. Another option is to ask for additional
time from your other lenders. Many lenders will work with you if you
contact them sooner rather than later.
The ICFE’s Web site at
http://www.icfe.info has many helpful spending tips
and worksheets for setting up a
one-page spending
plan and more.
To receive the same information by mail, please send $1
and a self-addressed, 55 cent stamped envelope to: ICFE Spending-Plans
PO Box 34070
San Diego, CA 92163
Note: Individual(s) available in San Diego for interviews on their
experience with payday loans, including copies of agreements/contract.
About the ICFE:
The Institute of Consumer Financial Education (ICFE),
founded in 1982 by the late Loren Dunton - creator of the “certified
financial planner” (CFP) designation - is dedicated to helping consumers
of all ages to improve their spending, increase savings and use credit
more wisely. The years between 1984 and 2000, the ICFE was also known as
the National Center for Financial Education (NCFE).
The ICFE is a nonprofit consumer education organization that has helped millions of people through its education programs and resources. Over
one million “Credit
/ Debit Card Warning
Labels” and “Credit
/ Debit Card Sleeves” are in circulation world wide.
The ICFE’s on-line help for consumers who spend too much
was featured in PARADE Magazine (June 9th, 2002) in the Intelligence
Report section. The money helps and tips are from the “Money
Instruction Book,” a course in personal finance, which was completely
revised and updated in 2002 and is positioned to become among the premier
programs in the new bankruptcy and debtor education initiatives.
The ICFE’s “Do-It-Yourself Credit File Correction
Guide,” now in its Twelfth Printing, is in use by thousands of consumer credit and debt
counselors in addition to tens of thousands of consumers. It received a
“buy” rating in July, August and November from nationally syndicated
financial columnist, Humberto Cruz in his column, “The Savings Game".
BottomLine Personal newsletter gave the Guide a “Send For” rating in
September 2001. The ICFE and our do-it-yourself approach to credit file
correction was featured on NBC Nightly News on 04-30-02. The Spanish
edition of the Guide premiered in January 2002. Syndicated columnist,
Robert Heady also gave the ICFE Guide a “buy” rating.
The ICFE Web site at: www.icfe.info helps consumers with
mending spending, learn about the
proper use of credit, budget and expense guidelines, how to set up and implement a
spending-plan and also access financial education courses and videos and how to
teach children about money. Other ICFE services include a
free eNewsletter, and an
on-line resource center of financial education
learning tools, including videos, books and personal finance courses.
Consumers may learn more on the Internet about the "Do-It-Yourself
Credit File Correction Guide" here, or fill out our request
form, indicating your areas of interest.
For more information contact Paul Richard, RFC ICFE Executive Director at 619-239-1401.
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