|
Money and Mobility
Many off-base check-cashing stores also make “payday
loans” to military personnel and other individuals who
work full time. Let’s say you need $100 and go to a
payday lender. Here’s how your loan works:
 You show
the store whatever proof they need that you can cover the check: pay stubs or
other paperwork.
- The store asks you to write them a check
for around $120 and agrees not to cash it until your payday.
- You get back $100 in cash. The store keeps the
extra $20 as the fee for the loan. (Most stores
charge between $15 and $30 for a payday loan.)
- The store cashes your
check on the agreed-upon date.
But, after the time period is up, what happens if you don’t
have the money in your checking account to cover the check
you wrote? For a fee, you can extend the loan. In fact, this
cycle usually continues as long as you pay the fees. In time,
you could end up paying anywhere from 450 percent to 650 percent
in fees and interest charges. Why so much? Because many states
have no rules limiting the fees these stores can charge.
You have better options. For starters, many bases offer
financial counseling services to help young military families.
Another option may be a short-term loan from a credit union
or bank.
|
