Just as legislation for payday lending has been tightening the industry’s guidelines some lenders are still offering payday loans for unemployed borrowers and others with no credit checks. (Read on …)
Four out of 10 U.S. workers often or always live from paycheck to paycheck, according to a survey released on Monday.
Such a need for quick cash explains the popularity of online payday loans more than ever.
Women are more likely to live paycheck to paycheck, at 47 percent, than men, at 36 percent, according to the survey conducted for CareerBuilder.com, an online job site based in Chicago. Overall, 41 percent of workers say they often or always live paycheck to paycheck - therefore, it would follow logic that they’d need the occasional faxless cash advance.
Also, 41 percent of women say they do not have enough income to live comfortably, compared with 29 percent of men.
U.S. government and other research reports have found that women earn about 77 cents for every dollar earned by men for comparable work. Women are also more likely to be single parents and, it’s safe to assume, apply for payday cash advances online or in person.
The new survey said 19 percent of workers who earn $100,000 or more annually often or always live paycheck to paycheck.
It found 58 percent of respondents report they set a budget each month. But one in five say they typically spend more than their budget, most often blowing it by eating out. The need for a - hopefully - easy payday loan then arises.
The survey also said one in five do not set aside any money for savings each month. Of those who do, 14 percent save $500 or more a month, 28 percent save $100 or less and 16 percent save less than $50.
It said 26 percent of women do not set aside any savings, compared with 17 percent of men.
The Fed said consumer borrowing rose at an annual rate of 6.2 percent in November, the sharpest pace since August, as credit card applications and requests for payday advances took off.
Borrowing rose by $12.3 billion usd in November, bringing the total consumer credit up to $2.39 trillion across the nation, also the largest increase since August.
Economists had expected total consumer borrowing to rise by $6 billion in November. But the increased amount is at least partially due to the popularity of regular and faxless payday loans.
The rise in total consumer debt was widespread, as consumers increased both their credit card debt and took out loans secured by automobiles and other big-ticket items, excluding real estate.
Consumer borrowing for auto loans and other types of so-called non-revolving credit rose at an annual rate of 3 percent in November, an increase of $3.8 billion.
Credit card borrowing, known as revolving credit, rose at an annualised 11.9 percent rate in October. That’s the largest percentage increase since June and the largest dollar increase since May.
The Fed’s measurement of consumer credit does not include mortgages and other loans secured by real estate. But it does take cash loans into account.
Now that the holidays are over, many Americans are beginning the climb out of staggering holiday debt that often looms long and large after the season is gone. Some will turn to bad credit payday loans.
Adam Levin, former New Jersey state consumer affairs director and Credit.com founder, may not agree with that strategy, however. But he does say the most important step in digging yourself out of debt is to create a plan.
“Look at the different interest rates on your credit cards,” he advises. “Pay off the ones that have higher rates first.”
If you can transfer a balance to a card with a lower rate, go for it. However, when you transfer certain balances, keep in mind that the existing balance on the card will likely stay at a higher rate. (But one that’s still lower than that on a cash advance.)
Do not under any circumstances, warns Levin, take a cash advance loan from a credit card to pay off debt on another. Cash advance rates are very high and cards also typically charge fees for the advance.
If you received a Christmas bonus, dedicate that to paying down the holiday debt. Whatever bills you ran up during the holiday season, pay them off on time. It’s best to make more than the minimum payment, but if you can’t, at least pay the minimum.
A late payment can trigger a universal default which causes rates on other cards to rise. But remember: “Minimum payments will keep you in debt forever.”
That’s why people end up rolling over cash advances and owing thousands in the long run.
You can also negotiate with your creditors for lower interest rates. But if you do get a better rate, Levin says you have to follow through. “You can’t make a deal with someone and then have late payments.”
As recent reports show, more and more Americans are applying for regular and faxless payday loans. What accounts for such popularity?
The following are a few fast facts regarding consumer debt in the country, courtesy of Moneymanagement.org. They help explain why so many individuals are anxious to use payday cash advances in order to quickly pare down their balances.
* Up to 85 percent of employees use work time to deal with personal financial concerns.
* Nearly one-third of workers admit that money concerns interfere with job performance.
* Financial problems (including debt and late online payday loan payments) are linked to increased levels of stress, conflict, and marital stress, as well as decreased levels of marital satisfaction.
* University administrators say they lose more students to credit card debt than to academic failure.
* Up to 40 percent of employees have said their health has been affected by financial problems.
* Consumer debt stands at more than $2.4 trillion.
Overall, Americans carry an average of $5,800 in credit card debt from month to month. Think about that. It’s little wonder they turn to resources such as instant cash loans.
Afterall, if making only the minimum payment on that debt every month, it would take 30 years to pay off - and that includes an additional $15,000 in interest.
In the face of volatile gas prices and higher energy costs, most area consumer said their debt has decreased from a year ago, according to a recent survey.
The survey from Consumer Credit Counseling Service of Delaware Valley revealed that 62 percent of people polled said they have less unsecured debt this year. It’s safe to assume that at least a handful of these individuals can thank the use of cash advance loans for this fact.
The survey compiled responses from 813 residents in Philadelphia, Delaware, Chester, Bucks and Montgomery counties in Pennsylvania, along with Camden, Gloucester and Burlington counties in New Jersey.
“I think there’s more emphasis right now with the high price of fuel and energy, and people really did take a look at their budget and cut back a little,” said Maureen Keown, vice president of communications and development at CCCSDV.
Of those respondents who said their unsecured debt was decreasing, approximately 59 percent indicated that they have taken active steps to reduce their debt. The leading method cited to lower debt by 34 percent was taking money from savings, as opposed to credit card consolidation, which ranked first in the 2005 survey.
There was no mention of no fax payday loan use.
Because many people dipped into their savings, 52 percent of those polled said they have saved less money in the last year, compared to 46 percent who reported saving less the previous year.
“If they’re paying an exorbitant amount on their interest, we do suggest they take some of that savings and pay down on higher interest debt because it will benefit you in the long run,” Keown said.
For consumers who said their debt has increased, 54.5 percent said gas prices were a primary reason, while 40 percent pointed to utility costs and another 34.5 percent cited rising health-care costs for a higher debt burden.
If expenses come down, of course, there will be less of a need to rely on payday cash loans or any fiscal resources.
The Star Courier has a question:
Ever hear of indentured servitude? It’s a historical concept that means you’re basically working for free to pay off some obligation. Ever just make your minimum credit card debt payments every month and feel like you are just spinning your wheels? Sometimes the two seem eerily similar.
It makes it easy to understand why many people hope no fax payday loans can provide some assistance.
There are millions of Americans who need credit card debt help now more than ever. With over $2 trillion of revolving consumer debt, and over $60 billion of credit card debt getting “charged off” as uncollectible every year, it just seems like the magnitude of the credit card debt epidemic keeps growing, gobbling up more and more American families every day.
So what can you do and where should you turn to get credit card debt help? Looking in the mirror is a good place to start.
Don’t just run out and apply for a faxless payday advance. The first thing you should do is to have a gut-check. Figure out how much of your money is going to interest and fees and then decide if you’re comfortable with that amount. It may be time for a change.
The next step is to do some serious budgeting and cash flow analysis. Sit down and review your expenses, dividing them into buckets to help you understand where your money is going. If more money is going out the door than coming in - and you are carrying credit card debt - you may need to seek guidance. Applying for cash loans is merely one idea and it’s typically a last resort.
If you decide that you do need credit card debt help, you should seek professional counseling. This means that you must understand your needs and then find the solution that fits best for you.
Because no one program is best for everyone, shop around and do your homework. Once you determine which solution is best for you, find a reputable service provider or debt help company that can provide the credit card debt help that you need.
Consider a no faxing payday loan at this point, but make sure you’ll well-educated on its pros/cons.
It is rarely fun to go out seeking credit card debt help, but it may be the first step to gaining financial independence and to losing the shackles of credit card debt that can make you feel like an indentured servant to your creditors.
You’re stuck in debt. Therefore, you wish to take out a few faxless payday loans in order to dig out of it.
It’s the type of thinking behind most people who acquire these resources, but the most sought after book on credit repair, “How to Get out of Debt: Get An “A” Credit Rating for FREE,” by Harrine Freeman, doesn’t exactly mention cash loans as a viable option for completing such an important task.
The guide provides consumers with step-by-step strategies to eliminate debt, receive a high credit rating, maintain their good credit, and create their own spending plan.
“How to Get out of Debt” comes at a pivotal time:the Federal Reserve reports that consumer debt has topped to over $2 Trillion dollars as of August 2006. Over 20% of consumers have maxed out their credit cards, bankruptcy filings are at an all time high and more and more people are applying for payday advance loans.
The book’s author, Harrine Freeman, knows about debt firsthand, having maxed out over thirteen credit cards, totaling $19,000 in debt.
“I got in debt when I was in college. I lost a job and my car was repossessed when credit card companies began to harass me. I finally took a part-time job, in addition to a full time job, to pay off my debt,” she said. “My passion for writing this book and starting a credit repair business is to meet my clients where they are by using practical steps that have helped thousands of people recover from financial ruin.”
In “How to Get out of Debt,” Freeman shares many tips to keep the credit card companies from knocking at your door:
1. Chop Credit Cards into Tiny Pieces: Stop using your credit cards and pay with cash.
2. Get Ahead: Pay more than the monthly minimum. If you can’t, it’s time to cut your spending.
3. Control the Reins: Develop a realistic plan to reduce your total debt.
4. Get a Deal: Reduce your interest rates, but be careful of the fine print—a credit card with 0% interest could cost you thousands in interest depending on how the credit card is structured.
5. Work it Off: Get a part-time job in addition to your full time job.
Most of these tips seems fairly obvious - and none of them include quick payday loan use.
It would seem like a natural conclusion: The more people that apply for payday loans, the more bankruptcy rates will rise in the nation.
A study has found, however, that tightening of the U.S. bankruptcy law may actually be resulting in more bankruptcy filings. It goes on to note that an increase in unsecured debt isn’t always to blame.
Robert M. Lawless, an Illinois College of Law professor, examined the relationship between changes in federal bankruptcy law and the filing rates by consumer debtors, the school said Tuesday in a news release.
He found that the liberalization of the bankruptcy law in 1979 did not lead to a significant rise in bankruptcy filings, but the subsequent tightening of provisions in 1984 did. He did not speak specifically about payday advances, but some results imply certain conclusions.
More stringent bankruptcy laws, he wrote, can have the “perverse effect” of creating expectations of higher recovery rates from debtors by banks and other lenders, which then encourage the lenders to expand consumer credit, which can lead to more future bankruptcies.
Calling this the “paradox of consumer credit,” Lawless also noted that the widely accepted idea among experts that bankruptcy filings are directly linked to outstanding consumer debt might be misplaced. In other words: Don’t blame the faxless cash advance lender.
Instead, growth in consumer debt appears to be linked to short-term decreases in bankruptcy filing rates, followed by a rash of petitions.
“Desperate borrowing by financially strapped consumers postpones the day of reckoning,” Lawless said, but “mounting consumer debt catches up with consumers, and eventually leads to higher long-term filing rates.”
While there’s no doubt individuals should learn as much as they can about cash loans before applying - and there is a danger with these resources - it is also possible that they receive too much blame around the country.
As South Carolina consumer groups fight to do away with payday loans in the state, they also need to face a troubling reality:
- Residents are losing their homes and falling behind on their bills at a higher rate than the rest of the nation.
It's al part of the price of the state’s high unemployment rate. High-interest loans such as payday cash advances don't help, either, but many consumers don't know what else to do.
Unlike poverty, graduation rates and other measures that have put South Carolina in the bottom tier of states for generations, South Carolinians’ debt troubles are recent.
From 1979 to 2001, residents kept up with their bills and mortgages much like the rest of the nation. But from 2002 to June 2006, the percentage of foreclosures and late home loan or cash loan payments in the state has been significantly higher than the rest of the nation, said Mike Fratantoni, economist for the Mortgage Bankers Association.
The pattern of debt woes mirrors another major change: South Carolina’s shift from having a lower-than-average jobless rate for the United States - from the late 1970s through 2000 - to, since 2001, having an unemployment rate significantly higher than the nation’s average.
The highest foreclosure rates tend to be in states with high jobless rates and economies tied heavily to manufacturing, especially the automotive industry. This also explains why people apply for no fax payday loans:
They need money for mortgage payments.
“What’s going on in the job market is the primary factor driving mortgage foreclosures,” Fratantoni said.