Imagine, you just received your check and you no longer have money. Of course, I know that has never happened to you. That only happens to other people, right?
Well, the truth is that it happens to many people and in the United States the way in which people solve this problem is usually with credit. The one that has credit cards resolves with them. But, not everyone has access to credit cards.
What happens to those who do not have credit cards? Many of them use the option of payday loans or go to places of rent with option to purchase (Rent to Own). These two monsters were conceived in the same place. And I imagine you can imagine what it was.
Since you do not have money and obviously you can not wait, you go and give $ 115 to the payday loan company to lend you $ 100. That’s 391% interest. They make you sign a contract with which they keep your check until your next payday.
It sounds very convenient, right?
The problem is now you’re also broke and you have $ 15 more. What is the solution? Obviously it is renewing that loan for another week. And as you are now in a deeper hole, you renew again. You do this for four weeks and you pay $ 60 to borrow $ 100. It makes sense, right?
It seems that yes because these places are everywhere where there are Hispanics.
Rent to Own (rent with option to purchase).
You do not have the money to buy the television you want. The solution to rent it with option to purchase. With only 78 comfortable weekly payments you can have the television you need. Very convenient.
The TV you want costs $ 549. But, since you do not have money, you sign the contract for the 78 weeks paying $ 13.99 per week. The problem is that there are several things that you do not know. First, the same television in any other store costs $ 449.
Second, because you were so broke that you could not pay $ 449 for a TV, you end up paying $ 1,098. And then you wonder why you can not get out of the hole.
Because your bank always cares about what is best for you, it offers the convenience of overdraft fees. So that you are not going to be embarrassed that a check bounces you or that you reject a purchase with the debit card.
The bank is so good that for many years they offered you this convenience even if you did not want it. Thanks to a new law, now you can decide not to receive that gift from your bank.
The only thing I have not mentioned is that, to avoid the embarrassment of your card not happening, the bank charges between $ 35 and $ 40 per transaction. Imagine it’s Saturday morning, you buy a fifty-cent coffee and you pay with the card, but there’s no money in the account.
The bank approves the transaction to avoid embarrassment, but charges you $ 35 for the coffee. That makes starbucks a child’s play. And God forbid that several transactions enter because you could pay over $ 300 as it has happened to so many people.
Check with your bank to see if they have you registered for this “protection”. If so, cancel this service immediately. Thank God you no longer have to accept the forced gifts that the bank imposes on you for their benefit.