Boise State Student Newspaper Discusses Payday Loans, Alternatives
By Paul RizzoPayday Loan Writer
Forget Boise St. playing in The Fiesta Bowl for a minute. That school’s student newspaper, The Arbiter Online, recently ran the following (paraphrased) editorial:
Regular and no faxing payday loan lenders know that it often takes naive borrowers a long time (and lots of fees) to figure out a simple fact:
If you didn‘t have enough money this week, you probably won‘t have enough to pay them back plus cover your other bills within a two-week period. In fact, they‘re willing to bet their business model on it.
Payday cash advance lenders count on you to roll the first loan over again, and again and again. The small fee that you were initially charged for the first loan quickly adds up to a hefty amount that is actually larger than the original loan. And they cash in on your financial misfortune.
Roughly 10 percent of all payday loans are made to people ages 18-25, according to, Vicki Jacobson, president of the Foundation for Credit Education in St. Louis.
OK, maybe you went over-the-limit on your credit cards and haven‘t paid your cell phone bill in two months. Maybe you‘ve just found yourself in an uncomfortable situation with your creditors that you need to resolve quickly.
Don‘t panic. The important thing to realize when you‘re in a tight financial situation is that “if it can be fixed with money, it isn‘t really a problem.“ That might seem trite and easy to say, but coming from a former debt-strapped college student, this article knows how you feel.
Here are some alternatives to borrowing from your already stretched paycheck with a cash advance:
- If you have never been late or over-the-limit on your credit card before (or at least not in the last six months), contact the credit card company and ask for a waiver on your monthly payment. You‘ll still incur interest charges but the extra breathing room could help relieve the pressure.
- If you don‘t already have a relationship with the campus credit union, now might be your time to get one because some credit unions offer a lower-cost small loan with an APR between 15 percent and 18 percent. When you compare that to the rate of 300 percent or more on a fast cash loan, the choice is a no-brainer.
- Make payment arrangements, especially with utility companies. During the winter months there are laws in place that protect consumers from having certain utilities (i.e. gas, electric, water) turned off due to non-payment.
- Ask a friend or relative if you can borrow the money. But before you ask for the favor, show that you are responsible and have every intention of paying the personal loan back by working out a repayment plan in advance to present to them.
The bottom line is that repeatedly using instant payday loans will likely lead to a debt trap that is difficult to escape. Re-examine your current income and expenses, figure out your “money wasters“ (i.e. things you‘re buying that you could do without) and commit to “pay yourself first“ so you always have an emergency cash reserve to borrow from.
