Don’t Put Payday Loan Debt in the Stockings
While it may be tempting to add a little Holiday Cheer by way of extra cash from a payday loan, the long-term debt you’ll experience will feel like a lump of coal after the New Year.
The Palm Beach Post reports:
stopthedebttrap.org looked at how much it would cost to buy the top 15 items on this year’s Toys”R”Us Hot Toy list using a payday advance — and the findings were startling.
The average interest on a payday loan is 391 percent nationally, according to the website. As a result, items purchased with an advance typically cost two to three times as much.
“The holidays are the most lucrative time of year for most payday lenders, who take advantage of people’s desire to do something nice for those they love,” the website said. “With signs promising EZ Cash. No Credit, No Problem. In fact, taking out a payday loan, even a small one, is a huge problem.”
Take this year’s hottest toy — a Hatchimal. The toy retails for about $70. If you use a payday loan to buy it, you’ll owe $154.
The report details how painful a payday loan can be after the holiday cheer has passed. Consumers should shop smart and avoid payday loans as a means of financing gifts this season.
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