Get Educated

Thinking of traveling during the winter holidays? Summer is the perfect time to sign up for a new travel credit card. Signing up months in advance is a great way to soak up bonus benefits including points for flight travel. Planning ahead at least five months gives you time to receive the card, and use the card.

How much do you need to spend? The answer varies, but you may want to spend anywhere between $2,000 and $5,000. Ways to spend include your daily expenses, bills, and insurance premiums. You may also want to consider buying gifts with your card. Keep in mind that you should only spend what you actually have in cash. This is the safest way to cover the costs before interest accrues.

When you run into a financial bind, payday loans are a quick way to get money in as little as 24 hours. These types of loans don’t require good credit or collateral. They are however; much more expensive than traditional which could be a major pitfall.

Experts highly recommend that people stay away from them because of the vicious debt cycle they put customers in. Payday companies however, say to only use them for emergency situations.

Of course, for most consumers it doesn’t work out that way. It can take months to repay a payday loan. In many cases, they have to take out another one just to cover it.

The choice is still yours. If you’re determined to take out a payday loan, at least go with a company that has a pretty good rating. Here is a list of payday lenders ranked according to reputation and overall costs.

  1. Ace Cash Express
  2. Check Into Cash
  3. Cash Central
  4. CashNet USA
  5. Cash 1
  6. Check N Go
  7. Speedy Cash
  8. Cash Store
  9. Pay Day Loan Today

In Part 1 of What Everyone Should Know About Payday Loans, we covered the fact that payday loans aren’t cheap and that they will ensure they get paid first. In Part 2, we will cover other secrets you should be aware of.

  1. State licensed lenders are normally safer: Before taking out a payday loan, you should know that not all lenders are the same. Many lenders found online are unregulated operating outside of the US. When there’s a dispute, this can make it much more difficult to resolve. They have direct access to your checking account. It’s best to go with someone who is regulated in your state because they must follow regulations regarding collections and loan renewals.
  2. These loans are due in full on your next payday: Many borrowers are so relieved to get the money, they don’t always understand the repayment terms. Payday loans are due in full on pay day. This means a $400 advance with $30 in fees per $100 today will make your paycheck $520 lighter come payday. This is a lot of money when you have other living expenses to cover.

Payday loans are quick and easy loans that don’t require a credit check or collateral. In many cases, they will deposit the money into your account within 24 hours. This can feel like a sweet deal to someone who is in a financial bind. But, there are things everyone should be aware of when it comes to these types of lenders.

  1. These loans are not cheap: Before taking out a loan, you should be aware of what you’re getting yourself into. There is usually an expensive flat fee, plus other fees ranging from $15 to $45. This is more expensive than credit cards.
  2. Don’t be sticker shocked on payday: The way these loans are set up, they ensure that they get their money first. That’s why you must give them access to your checking account so that the moment your paycheck comes, they can immediately withdraw fees and the principal.

Payday loans should only be used if an emergency has come up.

Check out Part 2 for more information.

When an emergency comes up, payday loans are quick and easy loans that can cover you fast. They don’t require a credit check or collateral and in many cases, they will deposit money into your account within 24 hours.

What’s the drawback? You have to be comfortable giving them direct access to your account and forfeiting a huge chunk of your paycheck on pay day. For that reason, you should be aware whether you’re using it for a good reason or not.

First, ask yourself how often you’re taking them out and for what reason. Since they should only be used for emergencies, you shouldn’t be taking them out very often.  You should not take out a payday loan more than twice per year. If you’re using it more often than that then you’re probably taking out too many.  

Many people start using it as an extension of their paycheck or to cover a payment that their pay check missed. That’s incorrect usage. Payday loans are not designed to live on. They are for emergencies.

Have you ever wondered what a direct payday loan lender is? These lenders are the companies who actually make the payday loans. Direct Payday Loan Lenders generally….

  • Market the loan. This means they find people who want to get the loan and qualify for it.
  • Underwrite it. Decide whether they want to give the person the loan or not.
  • Fund it. Are able to give the loan to the person.
  • Collection. Are able to take payments out of the person’s checking account when it comes due.

This is important to note because there are some companies who aren’t the direct lender. These companies do part of what’s listed above such as marketing. Some are only there to gather to person’s application information. These are network companies and usually they work with multiple lenders. With direct payday loans you can apply directly through their company for a loan.

How much do you know about what’s in your credit report? Many people may be aware of their score, but their are components that affect your score. When you decide to take a look at your credit report summary, here are 5 things you can expect:

  • Your payment history: This shows you any positive or negative information showing up in your credit file. It shows any late payments or actions from collection agencies.
  • Available credit: This shows you what percentage of available credit you’re using and if you’re using too much or too little.
  • Credit age: Your credit age is how old your credit history is.
  • Range of credit: This part will show exactly what is on your report including mortgages, car loans, credit cards, and student loans.
  • Number of inquiries: Every time you apply for credit, it shows up on your account as a hit.

It’s important to be informed on the items in your credit report so you’ll know what other others are looking at too when they view your report. Read More

Believe it or not, credit history has a huge impact on your overall credit score. It comes in third place right after payment history and amount owed. As you can see, if you want to keep your credit score, you can’t ignore this important factor. Here’s how you can score high in this very important area:

  • Keep old accounts open: It may be tempting to close an old account, but don’t. The older your accounts are the better it looks towards your overall score.
  • The earlier the better: The earlier you start using credit, the better it looks for your credit history. The key is to be responsible with what you borrow.  
  • Take caution when opening new accounts: When opening new accounts, you’re actually lowering your points in this category.

If you keep your old accounts open and remain responsible with payments, you have a great chance of keeping points in this category high.

The amount of time you’ve had credit makes a difference in your credit score. In fact, after payment history and amounts owed, length of credit history is the most influential part of your FICO score.

Length of credit history means…

  • Age of your oldest credit account
  • Age of your newest credit account
  • Average age of all your accounts
  • How long various credit accounts have been opened, such as mortgages, credit cards and auto loans.
  • Length of time since different types of credit accounts have been used.

Keep the length of your credit history in mind the next time you check your credit score. The longer you can prove your history, the better the it looks towards your credit score.

Have you ever heard of salary loans? Salary loans are similar to payday loans except the fees are much lower and they are done at your local bank. You usually can only borrow up to $500, although there are some cases where you may be able to borrow more. Here are some advantages to taking out these kinds of loans.

  • Lower interest rates – The interest rates on these loans are much more manageable than pay day loans.
  • Lending standards – Lending standards are making it easier to borrow money even if you have poor credit or no credit at all.
  • Build credit – If done correctly, you may be able to build your credit score with these loans.  

Word of caution…only take out these loans for emergencies. The payments are due right away meaning there is a possibility that you’ll run short on cash until your next paycheck.