Many banks actively encourage their clients with low balances to overdraw their accounts. That means, if the customer writes a check or uses her debit card and has insufficient funds in the account, the bank clears the check by granting a temporary overdraft (a short-term loan), up to a specific limit. The customer is saved from the problems of bounced checks or interrupted shopping sprees.
Sounds like a good deal for the customers, right? That's what the banks say. They claim overdrafts are an added convenience to customers.
The truth is, they're often a very bad deal for the customers. Here's why.
When a bank grants a regular line of credit, the interest charged may be up to say, 20% or so. However, for overdrafts, banks don't charge interest -- they charge a flat fee on each transaction. A fee that does not depend on the value of the transaction.
Let's see how that works. Overdraft plans fees may be as high as $35 per check. We'll assume a more conservative fee of $20 per check. If you have four checks totaling $200 that have insufficient funds against them and the bank automatically activates the overdraft and clears those checks, you will owe $80 in overdraft charges.
Unlike revolving lines of credit which you can repay at your convenience, an overdraft has to be settled in just a few days. Let's say the bank allows you to run the overdraft for 14 days.
A loan of $200 for 14 days incurring charges of $80 translates into an Annual Percentage Rate (APR) of 1043%!
A "convenience" for customers? Not at these rates.
What does this remind you of? It reminds me of payday loans and cash advances. That�s the other kind of lending that costs you such sky-high APRs. In fact, if you choose to repay a cash advance on due date and not roll it over, you'll likely be charged far less than what the banks charge you for an overdraft.
It gets even worse. Banks have software that ensures that your largest value checks and debits get processed first. There may be some logic to that. However, this arrangement also means that when there are insufficient funds in your account, instead of paying one overdraft charge on one large check, you pay several charges on several smaller checks!
Plus, most customers don't even realize that they are overdrawn until the bank notifies them about it.
Consumer advocates say that banks are perfectly aware that many people barely make it from payday to payday. These customers typically have very low balances. Rather than offer them a service that would be in their interests, banks extract high fees from them to cover bounced checks.
If you are caught short between paychecks, consider arranging funds from other sources rather than turn to overdraft protection. The best solution to the problem is to systematically build up cash balances so that you don't face such a situation in the first place.
About the Author
Prakash Menon is a financial expert and writer specializing in managing personal debt and providing wealth building solutions. He has written on
signature loans, personal debt management and other topics. See http://www.payday-cashadvances.net for related articles.
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Bank | Overdrafts | Loan | Paychecks | Personal Debt
Sunday, December 16, 2007
Why Do People Borrow?
"Do you often wonder why people borrow? Have you always done everything in your power to keep "borrowing" and "debt" at an arm's length? Do you for some reason feel there is still an element of stigma attached to being in debt?
Well, times have changed. Borrowing money is no longer something people are embarrassed about or consider only as a last resort. It has become a way of life for millions of people around the world, enabling them to survive times of crises if not live out their dreams. In the U.S., thousands borrow money every single day. You might not think of it that way, but you are actually borrowing money each time you use your credit card!
If they couldn't borrow money easily, most average Americans would find it very hard to own a home or a car. After all, how many of us have thousands stashed away in our bank accounts at any given point of time? When you have several day-to-day financial obligations to meet - putting food on the table, sending children to school, paying the rent and medical bills - borrowing is often the only way to raise money for big transactions, like buying a house or funding a business.
Being in debt is a reality for most people today and it is a perfectly acceptable situation if are on top of your finances. As long as you are managing your money in a way that ensures you regularly pay back what you have borrowed, there is nothing to worry about. Debt becomes a problem only when you start to live beyond your means or if you borrow without thinking of how to repay it.
Because it has become an integral part of life, borrowing is easier today than it has ever been. There are thousands of banks and other financial institutions that lend money. These traditional lenders however favor borrowers who have good credit ratings. But even people with bad credit now have avenues for borrowing. There are hundreds of creditors today who specialize in giving loans to people with repayment problems in their past. Many even extend loans without collateral, which makes it easy for people who are not homeowners to borrow.
You can borrow money for whatever you wish. A mortgage allows you to buy a home. A refinance loan enables replacing the original mortgage with a loan at lower interest. A personal loan can be taken if you need cash to tide over an emergency or if you want to make purchases, fund a vacation, get your child a good higher education, carry out home repairs or for any other purpose. A home equity loan is money borrowed against the equity you own in your home. The money could be used for anything. Then there are auto loans that can help you own your dream car.
Borrowing can be a positive thing. It can serve as a means to an end. If you are prudent with your finances, taking a loan could work out well for you. Don't get swayed by alarmist projections in the media that Americans have lost control of their finances and the nation is doomed to live in debt. According to the Federal Reserve, vast majority of Americans either owe nothing to creditors or have minor debts that they can pay off comfortably. "
About the Author
I write articles for www.badcreditpersonalloan.com which offers you help with personal loans, business loans, mortgage loans, refinance loans, payday loans, computer loans, debt consolidation loans, auto loans and more.
Technorati tags :
Borrow | Money | Debt | Credit Card | Loan| Bad Credit| Business Loans
Well, times have changed. Borrowing money is no longer something people are embarrassed about or consider only as a last resort. It has become a way of life for millions of people around the world, enabling them to survive times of crises if not live out their dreams. In the U.S., thousands borrow money every single day. You might not think of it that way, but you are actually borrowing money each time you use your credit card!
If they couldn't borrow money easily, most average Americans would find it very hard to own a home or a car. After all, how many of us have thousands stashed away in our bank accounts at any given point of time? When you have several day-to-day financial obligations to meet - putting food on the table, sending children to school, paying the rent and medical bills - borrowing is often the only way to raise money for big transactions, like buying a house or funding a business.
Being in debt is a reality for most people today and it is a perfectly acceptable situation if are on top of your finances. As long as you are managing your money in a way that ensures you regularly pay back what you have borrowed, there is nothing to worry about. Debt becomes a problem only when you start to live beyond your means or if you borrow without thinking of how to repay it.
Because it has become an integral part of life, borrowing is easier today than it has ever been. There are thousands of banks and other financial institutions that lend money. These traditional lenders however favor borrowers who have good credit ratings. But even people with bad credit now have avenues for borrowing. There are hundreds of creditors today who specialize in giving loans to people with repayment problems in their past. Many even extend loans without collateral, which makes it easy for people who are not homeowners to borrow.
You can borrow money for whatever you wish. A mortgage allows you to buy a home. A refinance loan enables replacing the original mortgage with a loan at lower interest. A personal loan can be taken if you need cash to tide over an emergency or if you want to make purchases, fund a vacation, get your child a good higher education, carry out home repairs or for any other purpose. A home equity loan is money borrowed against the equity you own in your home. The money could be used for anything. Then there are auto loans that can help you own your dream car.
Borrowing can be a positive thing. It can serve as a means to an end. If you are prudent with your finances, taking a loan could work out well for you. Don't get swayed by alarmist projections in the media that Americans have lost control of their finances and the nation is doomed to live in debt. According to the Federal Reserve, vast majority of Americans either owe nothing to creditors or have minor debts that they can pay off comfortably. "
About the Author
I write articles for www.badcreditpersonalloan.com which offers you help with personal loans, business loans, mortgage loans, refinance loans, payday loans, computer loans, debt consolidation loans, auto loans and more.
Technorati tags :
Borrow | Money | Debt | Credit Card | Loan| Bad Credit| Business Loans
Why Payday Loans Can Damage Your Financial Health
If you are thinking about using a Payday Loan to provide for those unexpected expenses there are several things you need to consider.
The reasons to avoid a Payday Loan vary, but probably the most obvious reason is the dangerous interest rates that this type of borrowing charges.
The Payday Loan companies claim that the level of repayment is more important to their clients than the actual interest rate, and this is a fair point but these high interest rates could mean that you could end up in worse financial shape than before.
It is very important to consider all your options and if this is the only form of borrowing you can get do research several companies to get the best interest rate or if at all possible to look for another way to get the money that you need.
The next most important reason you need to avoid Payday Loans is the high fees that are charged when you miss a payment! If a payment is missed, you will then have to pay back even more money to the cash advance company. By missing one payment you can find that the amount you owe has increased by up to 50%, and this will put you into an even worse financial fix, that you may not be able to overcome.
The payment terms that you have to accept may also be hard to live with. It will probably make more sense for you to consider using your credit card if you get into a financial mess. You will pay less in the long run if you borrow from your credit card than you will if you get a Payday Loan. By making a wise choice now you may be able to keep yourself out of a financial hole that may be impossible to get out of once you fall in.
If you need a large amount of money, then you must try to get a loan from a regular loan company first. The repayment terms will be a lot more affordable and this will allow you to pay them off much sooner. This means that you will be able to keep more of your money in your own pocket, which is what everyone wants to do.
If you can possibly avoid using a Payday Loan company then do so, if you must use this source of credit proceed with caution and try to borrow only the very minimum you can manage.
About the author:
For further vital information news and views about Payday Loans pay a visit to www.paydayloancenter.info
You may reproduce this article provided you maintain an active link back to www.paydayloancenter.info
Technorati tags :
Payday Loan | Financial | Money | Credit Card
The reasons to avoid a Payday Loan vary, but probably the most obvious reason is the dangerous interest rates that this type of borrowing charges.
The Payday Loan companies claim that the level of repayment is more important to their clients than the actual interest rate, and this is a fair point but these high interest rates could mean that you could end up in worse financial shape than before.
It is very important to consider all your options and if this is the only form of borrowing you can get do research several companies to get the best interest rate or if at all possible to look for another way to get the money that you need.
The next most important reason you need to avoid Payday Loans is the high fees that are charged when you miss a payment! If a payment is missed, you will then have to pay back even more money to the cash advance company. By missing one payment you can find that the amount you owe has increased by up to 50%, and this will put you into an even worse financial fix, that you may not be able to overcome.
The payment terms that you have to accept may also be hard to live with. It will probably make more sense for you to consider using your credit card if you get into a financial mess. You will pay less in the long run if you borrow from your credit card than you will if you get a Payday Loan. By making a wise choice now you may be able to keep yourself out of a financial hole that may be impossible to get out of once you fall in.
If you need a large amount of money, then you must try to get a loan from a regular loan company first. The repayment terms will be a lot more affordable and this will allow you to pay them off much sooner. This means that you will be able to keep more of your money in your own pocket, which is what everyone wants to do.
If you can possibly avoid using a Payday Loan company then do so, if you must use this source of credit proceed with caution and try to borrow only the very minimum you can manage.
About the author:
For further vital information news and views about Payday Loans pay a visit to www.paydayloancenter.info
You may reproduce this article provided you maintain an active link back to www.paydayloancenter.info
Technorati tags :
Payday Loan | Financial | Money | Credit Card
Saturday, October 27, 2007
Why Payday Loans should be avoided
If you are considering getting a payday loan for the first time or are looking for information regarding payday loans, then this article will be of great help to you. Payday loans are designed to provide you with some quick cash until your next paycheck.
A payday loan is a short term loan. Usually the term is 1 to 2 weeks. When you get your next paycheck, the loan must to be repaid. Loans of $500 to $1000 are easy to qualify for with no credit check and the funds are deposited into your bank account in 24 hours and you can apply online and be approved in minutes. If you are faced with an emergency like unexpected medical bills or auto repairs and have no other option, then a payday loan may be the only answer because it is fast and discreet.
Be aware that interest rate is penal on this type of loan should only be considered if you have no other option. Use your credit card or borrow from friends or family if at all possible. A payday advance loan is the most expensive form of finance on the market. If you find you are using this type of finance on a regular basis, you should consider enrolling into a debt counseling program to help get you finances back on track and avoid paying high interest rates to payday loans companies.
About the author:
For more information on payday loans and some of the better alternatives check out.Instant Payday Loans Online-http://payday-advance-now.com/
(c) Noel Hynes, 2005. Reprint rights granted to copy and publish this article as long as the article and by-line are reprinted intact.
A payday loan is a short term loan. Usually the term is 1 to 2 weeks. When you get your next paycheck, the loan must to be repaid. Loans of $500 to $1000 are easy to qualify for with no credit check and the funds are deposited into your bank account in 24 hours and you can apply online and be approved in minutes. If you are faced with an emergency like unexpected medical bills or auto repairs and have no other option, then a payday loan may be the only answer because it is fast and discreet.
Be aware that interest rate is penal on this type of loan should only be considered if you have no other option. Use your credit card or borrow from friends or family if at all possible. A payday advance loan is the most expensive form of finance on the market. If you find you are using this type of finance on a regular basis, you should consider enrolling into a debt counseling program to help get you finances back on track and avoid paying high interest rates to payday loans companies.
About the author:
For more information on payday loans and some of the better alternatives check out.Instant Payday Loans Online-http://payday-advance-now.com/
(c) Noel Hynes, 2005. Reprint rights granted to copy and publish this article as long as the article and by-line are reprinted intact.
Why Starve Your Needs When Payday Loans Are There To Gratify Them
The long awaited paycheque is finally here. However, the reverie with the paycheque is not expected to last long, because of the various expenses yelling for their fulfilment. Having spent a major part of his income the individual is left with nothing or very less to tend even to the day-to-day expenses. Had fasting or some other ways of postponing the needs been of help, the individuals would have readily tried them. However, they rarely do help.
A more viable solution for these mid monthly blues are payday loans. Payday loans offer a solution to the problem. Instant cash is made available through payday loans to enable borrowers meet the needs.
Fast approval of payday loans:
It is often contended as to why people opt for payday loans when other loans can also be used. This is because the process of approval of other loans is long drawn as various valuations and checks are involved. Payday loans, being needed for urgent needs cannot do with the delay. Hence payday loans, that are approved in as little as 24 hours.
Payday loans are short-term loans that are repayable within the next payday. Since they are taken in order to meet the day-to-day expenses, the maximum amount lent is �500. Payday loans are secured loans having the next month�s salary as the collateral.
Eligibility for payday loan:
Thus, it can be ascertained that employment is a prerequisite for the payday loans. Most lenders desire a borrower to be employed for a period of at least 90 days. An unemployed person may not qualify for the loan. Along with employment, the borrower will have to fulfil the following basic criteria for getting the payday loan:
� The salary or income received in any form must be deposited directly into the bank.
� The borrower must have a bank account.
� The borrower must have a chequebook or debit card.
The process of payday loans starts with the application by the borrower. With more and more lenders offering their services through internet, borrowers� task has been eased. An application faxed to the lenders gets a much speedier response. The money is transferred to the borrowers� bank account through wire transfer.
Types of payday loans:
There are various types of payday loans doing the rounds of the loans market nowadays. Some of them are as follows:
INSTANT PAYDAY LOAN
Some lenders term their payday loans as instant payday loans. In fact, payday loans are designed to offer fast cash. Thus terming ones product as an instant payday loan is like adding synonymous adjectives.
NO FAX PAYDAY LOAN
A no fax payday loan requires the borrower to have a higher credit score. A high credit score is seen as a higher credibility. The value of the property must be about two to three times of the annual income received by the borrower. The more is the value of the home, the more will the borrower be able to receive as payday loans.
ONLINE PAYDAY LOAN
Online payday loans are the loans that are available through the internet. These loans are quickly approved to enable borrowers to have instant cash. Borrowers apply by filling the online application form available on the website of the loan providers.
However, the caution �think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it� must be strictly adhered to. A payday loan cannot be used every time a financial crises crops up. Large number of loans will require a larger repayment, thus making them difficult to be borne. A more judicious use of the monthly income and the habit of saving will help in improving the financial scenario to a large extent.
About the Author: Andrew baker has done his masters in finance from CPIT. He is engaged in providing free, professional, and independent advice to the residents of the UK.He works for the Secured loan web site uk finance world for any type of uk secured and unsecured loan please visit http://www.ukfinanceworld.co.uk
Source: www.isnare.com
A more viable solution for these mid monthly blues are payday loans. Payday loans offer a solution to the problem. Instant cash is made available through payday loans to enable borrowers meet the needs.
Fast approval of payday loans:
It is often contended as to why people opt for payday loans when other loans can also be used. This is because the process of approval of other loans is long drawn as various valuations and checks are involved. Payday loans, being needed for urgent needs cannot do with the delay. Hence payday loans, that are approved in as little as 24 hours.
Payday loans are short-term loans that are repayable within the next payday. Since they are taken in order to meet the day-to-day expenses, the maximum amount lent is �500. Payday loans are secured loans having the next month�s salary as the collateral.
Eligibility for payday loan:
Thus, it can be ascertained that employment is a prerequisite for the payday loans. Most lenders desire a borrower to be employed for a period of at least 90 days. An unemployed person may not qualify for the loan. Along with employment, the borrower will have to fulfil the following basic criteria for getting the payday loan:
� The salary or income received in any form must be deposited directly into the bank.
� The borrower must have a bank account.
� The borrower must have a chequebook or debit card.
The process of payday loans starts with the application by the borrower. With more and more lenders offering their services through internet, borrowers� task has been eased. An application faxed to the lenders gets a much speedier response. The money is transferred to the borrowers� bank account through wire transfer.
Types of payday loans:
There are various types of payday loans doing the rounds of the loans market nowadays. Some of them are as follows:
INSTANT PAYDAY LOAN
Some lenders term their payday loans as instant payday loans. In fact, payday loans are designed to offer fast cash. Thus terming ones product as an instant payday loan is like adding synonymous adjectives.
NO FAX PAYDAY LOAN
A no fax payday loan requires the borrower to have a higher credit score. A high credit score is seen as a higher credibility. The value of the property must be about two to three times of the annual income received by the borrower. The more is the value of the home, the more will the borrower be able to receive as payday loans.
ONLINE PAYDAY LOAN
Online payday loans are the loans that are available through the internet. These loans are quickly approved to enable borrowers to have instant cash. Borrowers apply by filling the online application form available on the website of the loan providers.
However, the caution �think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it� must be strictly adhered to. A payday loan cannot be used every time a financial crises crops up. Large number of loans will require a larger repayment, thus making them difficult to be borne. A more judicious use of the monthly income and the habit of saving will help in improving the financial scenario to a large extent.
About the Author: Andrew baker has done his masters in finance from CPIT. He is engaged in providing free, professional, and independent advice to the residents of the UK.He works for the Secured loan web site uk finance world for any type of uk secured and unsecured loan please visit http://www.ukfinanceworld.co.uk
Source: www.isnare.com
Work At Home Scams Thrive On The Internet
The ability to earn a living from home is one that millions of people would enjoy. No one likes being a slave to a time clock, and no one enjoys working for a difficult boss. The notion of working from home is appealing to everyone who has ever had an unpleasant job, and thousands of Americans try their hands at it every year with varying degrees of success.
Where there is opportunity for success, there is also opportunity for fraud, and the work at home sector is no exception to that rule. Offers to work from home are common subjects of spam e-mail, and there are thousands of Websites devoted to lavish descriptions of the riches one can acquire while working from home. Unfortunately, most of these offers are fraudulent, and the only thing that most people will get out of them is a lighter wallet. Offers to get rich at home while stuffing envelopes or processing medical claims for physicians earn far more for the people selling them than they do for the victims who buy them.
These are but two of the common work at home scams that can be commonly found in e-mail solicitations or in the classified advertising sections of business-related magazines. Anyone who is considering investing in a plan to work from home should first consider the following:
You can't get something for nothing. If a company promises that you can make thousands each week from doing little or no work, you should be suspicious.
Do not respond to solicitations that come via e-mail. These messages are literally sent out by the millions in hopes that a few people will believe the offer and send money. Don't do it.
Find out what it is you will do to get paid. Then do some research on your own. Is there a market for the work you will be doing? Look into it.
Research the company involved. Thanks to the Internet, it's as easy as looking them up in a search engine. See what others have to say about the company.
Do you have to invest money? How much? What do you receive? Can you get a refund if you change your mind? Find out.
While there are legitimate opportunities to work from home, most offers to hire people to do so are fraudulent. By doing a little homework before you invest your money or time, you can avoid being another victim of a work at home scam.
About the Author:
�Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com, a site devoted to debt consolidation, credit counseling, payday loans and personal bankruptcy.
Source: www.isnare.com
Where there is opportunity for success, there is also opportunity for fraud, and the work at home sector is no exception to that rule. Offers to work from home are common subjects of spam e-mail, and there are thousands of Websites devoted to lavish descriptions of the riches one can acquire while working from home. Unfortunately, most of these offers are fraudulent, and the only thing that most people will get out of them is a lighter wallet. Offers to get rich at home while stuffing envelopes or processing medical claims for physicians earn far more for the people selling them than they do for the victims who buy them.
These are but two of the common work at home scams that can be commonly found in e-mail solicitations or in the classified advertising sections of business-related magazines. Anyone who is considering investing in a plan to work from home should first consider the following:
You can't get something for nothing. If a company promises that you can make thousands each week from doing little or no work, you should be suspicious.
Do not respond to solicitations that come via e-mail. These messages are literally sent out by the millions in hopes that a few people will believe the offer and send money. Don't do it.
Find out what it is you will do to get paid. Then do some research on your own. Is there a market for the work you will be doing? Look into it.
Research the company involved. Thanks to the Internet, it's as easy as looking them up in a search engine. See what others have to say about the company.
Do you have to invest money? How much? What do you receive? Can you get a refund if you change your mind? Find out.
While there are legitimate opportunities to work from home, most offers to hire people to do so are fraudulent. By doing a little homework before you invest your money or time, you can avoid being another victim of a work at home scam.
About the Author:
�Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com, a site devoted to debt consolidation, credit counseling, payday loans and personal bankruptcy.
Source: www.isnare.com
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