The Vicious Cycle of Payday Loans04:26 - Saturday 20 April 2013 - In Category Money
Do you need cash in a hurry? Are your bills overdue? Quick cash, where art thou? This is a familiar song I hear every day in the London capital. But can you survive being a victim to the payday loan triangle? Writes Winsome ‘Lyrical Healer’ Duncan.
Hold up, wait a minute and breathe! Press the pause button, have a chocolate biscuit, with a cup of tea and regroup.
Firstly, I can speak from first-hand experience when it comes to these loans. I once worked for a store who would offer cash until pay day, and trust me it’s not all as glamorous as it seems.
After a rigorous check to confirm you are employed and indeed who you say you are, only then can you receive a cash amount that is guaranteed by the cheque amount stated at the back of your debit card.
The problem is, as soon as your wages go into your account the store will deduct your cheque amount. For example, a cheque amount for £100 with additional charges of 20 per cent will immediately cost you £120.
These catch 22 situations mean you’ll always be chasing your red bank balance and find it challenging to keep up payments of normal bills.
My advice is to stay far away from payday loans, either borrow money from a family member or do without.