Trouble with money
Posted on October 2, 2007 in the Debt Elimination category
I have mentioned before our troubles with money and how we are working our way out of quite a hole we dug for ourselves. What is surprising to me, even now, was the ease with which we were able to obtain obscene credit lines with what I now consider to be to little income. Don’t get me wrong - we had great credit with both of us with a score over 700 but it was too much, too fast. Pile on top of that several poor decisions, a couple of (expensive) failed businesses, and life happening, we are just starting to dig our way out.
Now, with the increasing popularity of payday loans, it is even easier to get a short term loan. Marketed as a quick stop-gap an immediate financial need and your next paycheck, payday loans are really a fancy cash advance. The idea is simple - if you have an immediate need for cash (usually under $500) that you can basically use your next paycheck as collateral. Of course there is always a price for convenience - how does 90% or more APR sound to you? To put this into perspective - how would you like to pay $30 just to borrow $100 for a week - sounds absolutely ludicrous to me. However the fear of financial desperation, allure of instant gratification, and no credit check makes this a popular way to get some cash. This is should not be seen as an option.
To help us get out of our financial hole, we have contemplated using a mortgage loan to consolidate our debt and reduce the amount of interest we are paying. Problem is when we tried to refinance, we were turned down several times because of a lack of work history for me. Being a home business owner definitely has its perks but can create some issues in the short term. If you are looking for advice from someone who has gone through financial hardship, try this - spend less than you make.
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