Ways to avoid payday loans

U.S. & World

(NBC) – Nearly two-thirds of Americans are living paycheck to paycheck, according to a recent survey by Charles Schwab & Co.

Nearly half of those surveyed said they struggle to keep up with their monthly bills. 

Many turn to high interest loans when emergencies pop up between paydays.

Things went from bad to worse for Angela Vanderhoof, who fell behind on her bills, then became the victim of an assault and had to take a leave of absence from work.

“A car payment needed to be made, and so I needed something right now,” she said.

She turned to an online payday loan operation owned by Scott Tucker who fleeced four and a half million people out of a billion dollars with interest rates as high as 700 percent.

Most experts agree a payday loan is just about the last place to turn.

Instead, reach out to your creditors as soon as you’re in trouble. Chances are they’ll work with you. If that doesn’t work, be careful about additional debt.

Payday loans are illegal in many states, and many states have caps on the interest lenders can charge.

“Take a look at the APR, which is the annual percentage rate, not just the interest rate, and take a look at all the fees and the charges.”

Millions of Americans turn to non-profit credit unions, which typically offer better loan terms than a bank.

If you re repeatedly finding yourself in a hole, consider a credit counseling service.

Most are free, and they’ll work with you by phone or online, making a plan to break the cycle of debt once and for all.

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