Articles by Factsy Lady

Description: I have always been responsible with regards to balancing my finances. As a daughter of a financial planner, I learned the importance of paying my bills on time and developing a good credit score. I have also learned that unexpected bills do happen to the best of us. I have always kept an emergency credit card on hand to cover unexpected bills. My credit card company has always provided me with a reasonable interest rate that allows me to pay off the balance within a reasonable amount of time. That all recently changed. I had an unexpected medical bill creep up on me, and I noticed that my Visa balance was not going down as expected. I called the credit card company and asked what my interest rate was, since it was historically at 7.9%. The representative told me that they raised it to 23%. I was shocked since I had never been late on a payment, and I have a good credit score. The representative told me that they “re-evaluated” my account and raised the rate. I continued to ask questions. The representative told me to read my contract, as it states that they have the unfettered discretion to raise my interest rate at anytime. I asked if I could negotiate a lower interest rate, and she refused. It was at this point that I realized that the credit card company was now in control of my finances. To think that we as taxpayers recently bailed out the banks in their time of need, and yet they in turn do not give us any slack in our time of need. (Yes, the credit card is through one of the major banks that was provided with bail-out money). Since I want to be in charge of my finances, I now use a payday loan to cover an unexpected bills instead of a credit card. With a payday loan, the fees are in writing, and not subject to change at the lender’s discretion. Since I am typically able to pay off my emergency bills in under 60 days, a payday loan has turned out to be my new emergency money solution. My challenge to you as a consumer would be to consider a payday loan in lieu of a 23% interest Visa card, or using your overdraft protection with your bank. I utilized my overdraft protection insurance only on one occasion. I purchased lunch the day before payday, and I used $2.33 of my overdraft protection. My bank charged me $25.00 for this service. $25.00 to borrow $2.33 was certainly the worst financial decision that I have ever made, and I do not intend to use that “service” again. I encourage you to analyze your own financial situation and to consider the option of a payday loan if you have an unexpected bill arrive in your mailbox. Please keep in mind that payday loans should be used only for temporary financial needs, and not as a long-term financial solution.