Great Post!

It’s funny, even when I got gifts of cash from family, enough to make a dent and break the chain, it would soon start again. Eventually it got to the point where I began the payday double-dip. I went to a different company to get a payday loan, to cover the difference I didn’t have in my account to cover the fees and loan from company A. So for a long stretch, I was doing the two-step and advancing from one to pay the other. I thought it was smart that I took the lower amount with the company that charged lower fees….That didn’t last.

The low point was when I had reduced my hours and for a short period, was dancing between THREE payday companies. This is how it worked. I went to Company C, got a loan where they put it on a debit card of theirs. I withdrew the money and paid off Company B which held my cheque, re-advanced, then deposited the money into my account, so that the cheque I left with Company A would clear the next day and, you guessed it, I re-advanced from Company A.

Eventually through luck and a higher paying job, I broke the chain, over three pay periods. When I paid off Company A, I did not re-advance, and just danced the lowest amount I dared for expenses between Company B and Company C. When I paid off Company C (it worked out easier this way), I didn’t re-advance. And this is the funniest thing that hit home. When I did not re-advance from Company C, the gentleman said, and I kid you not, “Congratulations, you have just broken the payday chain.” That was an eye opener.

I’m basically done now, but without a tight control on my budget, there is a danger I may fall back into the temptation (which I have done, but this time I go for as little as I dare, and only one company).

I tell this very true story as a cautionary tale for anyone who has ever been tempted to do so. If you do think about it, make sure you have a budget and see how it fits, and you may think twice.

I still work in a bank…25 years now:)…and I’ve seen alot of changes in that time…you can cash a cheque without having an account BUT you must have 2 pieces of valid i.d. and the cheque must be drawn on that branch so we can verify the signature of the person that wrote the cheque…you must have 2 pieces of valid i/d to open an account…and you can be living in a shelter or hotel…I always try to offer a solution for the individual that does NOT include going to these cheq cashing places…and when they come in asking for the direct debit form on their account to give to one of these places I always make it clear what they are doing by giving them this form…they are giving them PERMISSION to debit them for what they owe which is not neccessarily the same amount as what they borrow…so if they borrow 500.00 and are debited back 700.00 they are on the hook for it because they have agreed to their terms and conditions…not one person has ever let that information stop them from going ahead, then when the funds are not there for the debit they are dinged 42.50 in NSF fees each time they try to put the debit through…one big vicious cycle…

I got stuck in a situation once where I WISHED there was a payday loan system… although given the interest fees, etc. I’m glad I made it through.

While in university, I moved up North to take a job for the summer. Had some emergency sushion, but not a whole lot. Turns out the company the Governemnt of Ontario had contracted out to for paying its employees was a known fiasco, and lost all of my financial info (and never admitted it).

So here I was 19 years old, stuck in the middle of nowhere, with no cash, and no way to get it. It was going to be another 1-2 months before they got around to paying me. No one accepted credit cards in such a remote area, and the one bank in the area (my own actually!) wouldn’t do such a short-term loan- all I really needed was a loan until my paycheque came through.

Now, their practices, are usurious and need serious reform. But I don’t think they should be abolished entirely.

Pol is right, having worked in a bank, even if the cheque was written from that bank we were not permitted to cash the cheque. A person must have an address and proper id to open an account and the cheque had to be deposited before cashing. It does make it difficult for some.

The Payday Loans is a terrible treadmill to get on and can be so difficult to get off because of the fees and fine print. There should be Federal Regulations that these institutions are accountable to.

Gail, you are providing a very valuable and free service with your daily blogs and your show. The education we receive from this and the discussions are very much appreciated. Thank you. Our family no longer views the money discussion as “taboo” and through your show and blog I am able to provide information for my teenage sons, one heading off to college. He will be aware of these places and hopefully share this informaiton too with his new found friends out on their own for the first time.