Saving Money: Quick Cash, High Cost
I didn't think it was possible. But it is. Folks, there is something worse out there than putting everyday expenses on a credit card, then carrying the balance. The guys I'm going to tell you about make the credit card people look downright benevolent. Meet your smiling neighborhood cash advance parlor.
These legal loan sharks go by names like EZ Money, Cash 'N Go, Red E Cash, Cash in a Flash, the Money Tree, and others.
Here's how it works. You want cash now. Payday isn't for another two weeks. So you head on down to the loan shop. Just show them your driver's license, bank statement and pay stub. Write a check dated two weeks from now for, say, $200. A minute later, you're back on the street, $170 making a comforting bulge in your wallet. Two weeks later, the loan shop deposits your check. Pretty cool, huh?
What's that? You say your check was for $200, not $170? Do you recall when they mentioned a "small convenience fee"? That's the missing $30.
What would you say if I told you that "small convenience fee" amounted to an annual interest rate of 416%?
How do these lenders get away with rates this high when the credit card companies are limited to 24% or less (cry me a river)? Because, technically, you don't pay any interest. Just that flat fee.
So what are the alternatives? Just try going into a bank and asking to borrow a couple hundred for a few days. I can still hear the loan officer giggling. Not a pretty sound.
One great alternative goes by many names. My bank calls it "Ready Reserve." It's a revolving line of credit tied to my checking account. If I write a check for more than my account balance, good ol' Ready Reserve transfers in money to cover the check. Next payday, I cover the reserve by telling the bank to apply part of my deposit to the reserve account. There's a small annual fee (around $10), plus credit card rates are applied to any standing balances.
If your need for cash is truly occasional, for unforeseen emergencies (are there foreseen emergencies?), try being your own quickie lender. Hold a garage sale, auction off some stuff, or take on part-time or temporary work in order to put a few hundred dollars in a war chest. Take the cash and buy traveler's checks. Put them away; just don't forget where. When you need the money, write out a check, put it in your stash, and take out the traveler's checks. Next payday, buy more traveler's checks and "redeem" your check. If you don't do it this way, most of you won't pay back the stash.
(Note: Some traveler's checks expire. Make sure you redeem them for new checks before the expiration date.)
If you find yourself short of money month after month, you need to make more money. Taking a $200 cash advance 10 times a year will cost you $300 a year or more.
John McCabe's Web Guides show you how to find more and better success in all facets of your life.
For more articles on living an abundant, vibrant, joyous life, come to http://Web-Guides.com
MORE RESOURCES:
 BBC News | Credit cards Superprime slime Economist, UK - As the credit boom reached its peak, the firm’s credit-card business was growing by a dizzying 20% or more a year, with younger consumers with scant track ... Overdue credit card bills show rise in June Credit Cards: How to Protect Your Limits Debt crisis spreads to credit cards |
 Reuters | Washington Mutual stock down on credit concerns Reuters - Citing the thrift's financial statements for the period ending June 30, Gimme Credit analyst Kathleen Shanley wrote that "many creditors have quietly been ... WaMu Drops Second Day as Gimme Credit Cites Liquidity Concern UPDATE: WaMu's Stock Down As Investor Confidence Drains WaMu spokesman: no need to rely on outside funding sources |
 AFP | Credit Suisse's cautious tactics in credit crunch pay off for now Wall Street Journal - CREDIT SUISSE Group's slow and steady approach may yet win the race. It seems to be working so far for the Swiss bank. While most bank bosses a few months ... Credit Suisse Bulks Up Despite Losses Credit Suisse cautious despite return to profit Credit Suisse defies fears by posting only a small markdown |
FCStone Group increases size of credit facilities Forbes, NY - AP 07.24.08, 3:55 PM ET FCStone Group Inc., a commodity risk management firm, said Thursday it has reached deals to increase the size of its credit ... FCStone increases credit lines Kansas City Business Journal FCStone Group, Inc. Announces Syndicated Margin Call Credit ... |
 CBC.ca | Credit-card firms investigate fraud at Canadian airport kiosks Computerworld, MA - By Jaikumar Vijayan July 24, 2008 (Computerworld) Low-cost Canadian airline WestJet has temporarily stopped the practice of allowing customers to use credit ... Does using your credit card to check-in expose you to fraud? Expert says it's not surprising airport kiosks possibly targeted ... Credit card fraud at Pearson International Aiport has people worried |
Cicero gas station reports attempt to disrupt credit card system Chicago Tribune, United States - An operator of a Cicero gas station called police Tuesday after finding that two men had climbed the roof of the business to cover up a credit card ... Rooftop gas theft scheme foiled |
 Sify | Misuse of unsolicited credit cards to be penalised Business Standard, India - PTI / Mumbai July 25, 2008, 16:03 IST Aggressive marketing by credit card issuing banks may bounce back on them with the Reserve Bank making it clear that ... Unsolicited credit card is no more your headache Credit cards get RBI boost RBI warns banks on credit card interest charges |
 The Southern Ledger | Executive says bank has more than enough capital to endure credit ... MarketWatch - The company has been one of the harder-hit banks during the credit storm, but analysts said it has effectively boosted its capital reserves to protect ... National City Reports Loss On Write-Down, Credit Losses National City Corporation Q2 2008 Earnings Call Transcript City National posts lower profit as it sets more money aside for ... |
 Wall Street Journal Blogs | Extra! Extra! Credit Concerns at New York Times! Wall Street Journal Blogs, NY - The NYT front page does not include a story about its credit default swaps. (nytimes.com) Shares of New York Times Co. are down 4%, but the newspaper ... Extra, Extra: New York Times (NYT) About To Get Downgraded To "Junk" |
 Gulf Times | Asian Stocks Fall on Credit Concern; National Australia Slumps Bloomberg - ``Investors are out there thinking everything's fine and another bank comes out and increases its provision for credit-related losses. ... Asian Stocks Fall Most in Six Weeks on Credit, Profit Concerns Asian Stocks Fall on Credit Concern; National Australia Slumps Asian Stocks Gain for Fourth Day on Easing Oil, Credit Concerns |
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