The average person’s experience with bankruptcy is losing a four-hour game of Monopoly. For those in severe financial crisis; however, filing for bankruptcy is no game, but rather an unfortunate necessity required to salvage their remaining assets. But what does it actually mean to declare bankruptcy? 

As frightening as bankruptcy may seem, having a solid understanding of it can remove some of that fear and help those in financial peril know what to do to avoid it. Here is a breakdown of the bankruptcy process and how declaring bankruptcy can affect your financial future.

What is Bankruptcy?

Declaring bankruptcy is a legal procedure that prevents citizens who’ve suffered from bad investments like payday loans or careless spending from becoming homeless and penniless by providing them an opportunity to rebuild and catch up on missed payments. Filing for bankruptcy can help reorganize and eliminate personal and business debt liability while also preventing banks and collection agencies from hounding you.

The Automatic Stay

Harassment from collection agencies can be devastating when struggling with mounting debt. Fortunately, creditors are prohibited from contacting you as soon as you petition for bankruptcy. Courtesy of an injunction known as the automatic stay, creditors cannot send collection letters or call to collect their debts, foreclose on or repossess property, or file a lawsuit to claim your wages. The automatic stay may take off some of the heat from creditors, but if you can’t settle your defaulted debts during this period of bankruptcy petition, then you must file for a chapter of bankruptcy.

Bankruptcy Chapters

There are different types of bankruptcies, which are usually referred to by their chapter in the U.S. Bankruptcy Code. Each of these bankruptcy chapters apply to either individuals or corporations and are further divided into two categories: liquidations and reorganizations. For instance, businesses may file under Chapter 7 to liquidate or Chapter 11 to reorganize their assets, while a farmer may qualify for Chapter 12 to relieve their debt. Cities and school districts can reorganize under Chapter 9 bankruptcy, whereas Chapter 15 applies to parties from different countries. Depending on their financial situation, most individuals file for Chapter 7 (consumer) bankruptcy or Chapter 13 (“wage-earner”) bankruptcy.

Get Protection Before Bankruptcy

While bankruptcy is designed to protect individuals from financial ruin, it is not a bailout, and there are consequences to declaring bankruptcy that will severely impact your credit score and ability to qualify for future loans. 

If you are drowning in debt, defaulting on loans, and facing creditors threatening foreclosure, filing for bankruptcy is not your only option. Progressive Debt Relief can help you recover from financial misfortune by negotiating and settling your unsecured loan debt, including payday loan debt. Contact us today 877.590.1847 to find out more about our services or to schedule a complimentary consultation .

Debt is commonly perceived as a negative side effect of borrowing money. However, there are actually several benefits to having debt. To determine your financial health, it’s important to understand which type of debt you have: good debt or bad debt.

Examples of Good Debt

Good debt is when money is borrowed to purchase something with a value that will increase over time. 

· Minimal credit card debt – If payments towards the principal balance are made on time, credit card debt can help build a credit score which will allow you to purchase a car or a home.

· Student loans – Having a college degree increases your value to employers and your likelihood of earning a higher salary over the course of your career. 

· Home mortgages and car loans – Homes not only give you a place to live, but they also grow in value over the years. The same can be said for automobiles, as long as they’re well-maintained.

Examples of Bad Debt 

Bad debt is debt that yields no return to the borrower.

· Credit card interest and penalty debt – If the balance is not paid down each month, borrowers will lose money over time due to high interest rates as well as late payment, overdraft, and annual fees. 

· Payday loans – Cash advances on paychecks are quite possibly the worst type of debt. The high interest rates of payday loans are designed to snowball costs.

 Eliminating bad debt is the first step in obtaining good financial health. If you’re struggling with payday loans or other bad debt, Progressive Debt Relief can help. Our debt assistance and credit counseling program can provide the tools you need to get back on a stable financial path. We are determined to ensure that you avoid future financial distress and strive to help you establish a debt-free life.

Contact us today 877.590.1847 to find out more about our services or to schedule a complimentary consultation.

To determine how much debt you should have at this stage of your life, we compiled the national average debt of Americans in each age group, from millennials to retirees. In this article, we’re focusing on the average debt for middle-aged adults and career professionals between the ages of 35 and 54.

Average Debt Middle-Age Adults: (Age 35 – 44)

During this period of life, the financial strain of spending too much begins to catch up with most Americans. The increased expense of childcare, bills, and mortgage result in adults of this age range carrying-over credit card balances, overdrawing their checking accounts, and tapping into their retirement accounts. According to a study commissioned by ValuePenguin.com, “this is the only age group where the majority (56%) did not pay off their credit card balances at the end of each month.” That’s probably why they call it a midlife crisis.

Per the U.S. Census Bureau, the average debt for this age group is $21,350. If you are around that debt amount, you can manage your debt by limiting your spending, creating and following a budget, and possibly considering debt consolidation to regain your financial health.

Average Debt Career Professionals: (Age 45 – 54)

At this age, most professional adults have advanced in their careers and have started saving towards their goal for retirement. Studies also show this age range controls the largest amount of America’s disposable income as credit card debt peaks for those between 45 and 54 years old to an average monthly balance of $9,096. Again, per ValuePenguin.com, “those who are 45 and older spend significantly more on their credit cards… likely due to the budgets they are operating with.” As adults continue to pay off their mortgage and car note, splurges like vacations and home improvements become affordable expenses for the gainfully employed.

Many are also in the process of emptying their nest as their children graduate high school and head off to college. However, having a child leave home does not necessarily mean they are financially independent. Parents often buy their kid a car as a graduation present or end up financing their college education. With the U.S. Census Bureau estimating the median debt for this age group at around $23,055, any additional expenses can increase debt and delay retirement if not budgeted correctly.

At this stage, student loans also become more manageable if not paid-off completely. This is especially true for those in this age range when you consider how much more affordable their student loans were. According to a Federal Reserve Report on the Economic Well-Being of U.S. Households, “the average American under 35 holds 182 percent more college loans than students that graduated in 1995.” Inflation just isn’t fair.

Get Expert Debt Relief

If you are still struggling with mounting debt at this stage in your life, reach out to Progressive Debt Relief. We can help you establish a debt-free life by settling your loans and other unsecured debt and providing you with the tools necessary to avoid future financial distress. Contact us today for a free consultation call 877-590-1847 or  free consultation find out more about our services or to schedule a complimentary consultation. 

Loans can be complex to beginners. If you’ve never made a big purchase like buying a house or car, you may not know how various loans work. Two basic types of loans are payday loans and bank loans. One basic and obvious difference between the two is that you get a bank loan from your bank or credit union and a payday loan from a payday loan lending company. But, there are a few more critical differences between the two. 

· Amount of money loaned: To start, payday loans are for far less than bank loans. The typical payday loan amount is between $100 and $1,000, since it is meant to be a sort of advance on a paycheck. Personal loans from a bank vary widely in value depending on credit history, income, and purpose of the loan, but the minimum amount can be anywhere from $1,000 – $10,000.

· Term of the loan: Payday loans are meant to be short term loans, usually just for 2 weeks until your next paycheck comes in. But, they can be dragged out considerably if not paid back quickly. Bank loan terms can vary from 30 years for a mortgage, to 5-7 years for an automobile, to 1 year for a personal loan. Generally, the more money the loan is for, the longer the term of the loan.

· Interest rate: Payday loan interest rates can be exorbitant. The average yearly payday loan interest is around 400%, but since they are only supposed to be for 2 weeks, the interest isn’t so high at around 15%. Personal loans from banks have a much less volatile interest rates since they are supposed to be paid back over a year or more. You will find rates from 6% – 36%, depending on credit history, income, and other factors. 

· Ease of obtaining the loan: Payday loans are extremely easy to get. All you need to provide is proof of age, an open bank account, proof of income, and your phone number, and you will walk out in a matter of minutes with cash in hand. With bank loans, it can take days or weeks for the bank to review your application, approve your request, and get you the funds. Personal loans are not generally given to those with bad credit or low income. 

· Riskiness of the loan: Due to the high interest rates, payday loans can send you into a downward financial spiral in the blink of an eye if you don’t pay. If you can avoid them, these types of loans are never recommended except in the case of a real emergency. With bank loans, you have more time and more options to consider. You can always refinance or restructure the loan to give you some breathing room. 

Personal loans from banks are always a better option than payday loans, if you are trying to choose between the two. Payday loans are just so dangerous because of the stacking fees every time you can’t pay. But if you find yourself caught in a payday loan trap, don’t lose hope – Progressive Debt Relief can help get you out. We have developed relationships with many of the top payday loan companies, so we know how to negotiate with them to get you a reasonable plan for paying back your loan. 

To get started, please contact us at 1-877-590-1847 for a free consultation. 

Before you go to your nearest store or a website for a payday loan, there are some important things you must know about the process. Understanding fully what you are getting into with a payday loan can make a world of difference for you. Don’t get lulled in by the promise of fast, easy cash without first investigating the strings attached. What seemed like a painless solution for many has so often brought them instead anxiety, increased financial difficulty, and the feeling of being trapped. 

How Do Payday Loans Work?

Getting a payday loan is easy, and that’s what makes it so appealing. You request the amount of money you need, typically ranging from $100 – $1000. The lender will give you the associated lending fees for the amount you request. If you accept the terms of the loan, they will ask you for a check in the amount of the loan plus the applicable fees. Alternatively, they could request access to your bank account to manually take out however much you owe at the end of the loan term. The loan length is usually two weeks, since that is when your next paycheck will come in. 

How Are Payday Loans Dangerous?

The trouble starts when you can’t pay the loan back the first time. What happens when you decide not to pay back the loan amount plus the loan fees after the first two weeks? Payday loan companies will let you extend the length of the loan for another payment of the loan fee. So, when your two weeks is up, and your loan fee was $30, you pay $30 more to extend the loan for another two weeks. If you continue to fail to pay back the loan, several payments of the loan fee can add up quickly, and then you find yourself trapped in a cycle. 

What are Other Terms for Payday Loans?

Payday loans are intended to be small amount, short-term loans to give you a quick influx of cash between paychecks. Though they are commonly called payday loans, you might find them called by several different names: payday advance loans, cash advance loans, small dollar loans, payroll loans, or salary loans. Just be aware that payday loans come in many guises, so don’t be fooled into taking one without realizing what you are doing. 

How Do I Break the Payday Loan Cycle? 

Progressive Debt Relief can help those trapped under payday loan debt. We’ve worked with many who thought they’d never be able to break the cycle, and they are now back on their feet with a manageable payment plan. We can help you reach a reasonable settlement with the leading payday loan companies so that you can breathe easy again. For a free consultation, give us a call at 1-877-590-1847 or submit our contact form.

Many borrowers with multiple credit card balances question how to go about tackling their mounting credit card debt effectively. Is it a good idea to completely pay off their credit card balance each month, or will doing so hurt their credit score? Here are some valuable, money-saving strategies to help eliminate credit card debt.

Compare Your Interest Rates

As a borrower, you should try to pay off your credit card balance each month, however; there is a right and a wrong way to go about it. First, compare the interest rates of all your credit card statements and prioritize them from highest to lowest. The higher the percentage rate, the more money you are paying in interest each month. 

Start with Your Highest-Interest Debt

In order to maximize your long-term savings, begin by making larger monthly payments toward the principal balance on the credit card with the highest interest rate while continuing to make the minimum payments on the other cards. Once the card with the highest interest rate is paid off, move on to the next highest card, and so on, card-by-card until your credit card debt is eliminated. Once paid off, keep the credit card accounts open. Canceling paid off credit cards can negatively impact your credit score. 

Control Your Spending

Becoming debt-free requires patience and discipline. As you eliminate your credit card debt, you may begin to notice an excess of funds in your account. Resist the temptation to spend. Assuming you have extra spending-money will land you right back in debt. If you’ve implemented these strategies and you’re still struggling to manage your debt, then you might need to consider professional debt relief services.

Seek Expert Guidance

Progressive Debt Relief will negotiate with your creditors to get you the best settlement possible and equip you with the tools necessary to avoid future financial distress. We strive to help you establish a debt-free life with the peace of mind that comes with financial security.

To find out more about our services, or to schedule a complimentary consultation, contact us today 877-590-1847.

Paying off debt can feel like being on a sinking boat. The more water you bail out, the quicker it refills. If you’re drowning in debt because of a payday loan, there are ways to get your head back above water. Clearly, the first step is to stop taking payday loans. Once you’ve stopped the cycle of borrowing, you can take advantage of the following services to help you regain control of your finances and get your payday loan debt under control.  

Extended Payment Plans

You can request an extended payment plan (EPP) from your payday lender to break your payments down into smaller monthly installments. To do this, your lender must be a member of the Community Financial Services Association (CFSA). As long as you don’t default on your extended loan, an EPP will delay interest fees and grant you time to repay your debt without the pressure of collection agencies breathing down your neck. 

Credit Counseling Services

If an extended payment plan isn’t an option for you, debt management and credit counseling programs are good avenues toward financial freedom by helping you establish a budget to make your monthly payments on time. Although payday loans have contractual terms that often prove difficult to work around, an experienced credit counselor may be able to get you out of debt by negotiating a debt settlement with your creditors.

Professional Debt Relief

With established relationships with all the major payday loan companies and creditors, Progressive Debt Relief has the experience and ability to settle payday loan debt efficiently and discreetly. Through free consultations and no upfront fees, our financial experts will work with your creditors to negotiate and settle your payday loan debt for good. 

To find out more about our services, or to schedule a complimentary consultation, contact us today.

Payday loan lenders have a bad reputation as sharks, preying on low-income earners in a time of need. Typically, a person will apply for a payday loan when they need cash instantly since it requires very little personal financial information to be approved. For those with bad credit and immediate needs, a payday loan seems very attractive indeed. In fact, this is exactly how payday loans get their name – they are meant to bridge the gap between paychecks when a person needs a small amount of money for a short amount of time. 

However convenient payday loans may appear, their interest rates can seem astronomical. The average interest rate on payday loans in the U.S. is about 400%, and it can be even double that figure. To put that in perspective, the average interest rate on credit cards is roughly 16%, according to Credit Karma. The extreme interest rates on payday loans receive much backlash and contempt. But why are they so high? Is it just a case of payday loan lenders being greedy and exploiting money-strapped people? 

That isn’t the full story. According to Forbes, payday loan interest rates are so high because they have to be. Otherwise, payday loan lenders wouldn’t be able to keep running their business. Tim Worstall calculates that in order for payday loan lenders to have a business, with a storefront and employees, and to cover the costs of defaulted loans, they’d have to charge an interest rate of 264%. If they simply charged that rate, they’d make no profit. 

Though that number may look high, Worstall argues that we need to look at it a little closer to figure out what’s really going on. Payday loans typically don’t have an APR since they are meant to be for the short term, like two weeks. So, they instead come with a lending fee which you pay back with the original loan. Let’s say the lending fee for a $100 loan is $20 for two weeks. To calculate the APR, you would multiply the $20 by 26, how many payday cycles there are in a year. Thus, you have an “interest rate” of 520%. But many loans don’t get rolled over for an entire year, so payday loan lenders must charge high lending fees in order to turn a profit on small value loans. 

This does not mean that payday loans are safe to take whenever you want. That’s precisely the danger in them. They seem like a quick fix, easy cash, without the hassle of bank applications and whatnot. But, if you don’t pay them back as soon as your next paycheck comes in, things could quickly spiral out of control. You could end up paying thousands of dollars for a loan that was a fraction of the cost. 

That’s where Progressive Debt Relief can help. We specialize in assisting clients get back on their feet after being buried by payday loan debt. The cycle is extremely hard to break, since the fees can quickly snowball on you. If you’ve found yourself trapped by the inability to pay off your payday loans, give us a call immediately for a free consultation at 1-877-590-1847.  

Payday loans can be a tricky thing to navigate. The goal is to get out of debt as quickly as possible to avoid excess interest, and many think the best option is to pay off one loan with another. Not only does this just perpetuate the debt cycle, but it can hurt your financial health in the long run.

Being in payday loan debt can be a scary thing. If your repayment date is looming over you and you can’t afford to pay it back, let us help. Follow these simple steps to help tackle that seemingly impossible debt.

1. Don’t panic. Payday loans are often advertised as a great way to pay for a one-time expense like a home repair, but the reality is that nearly half of all people who take out payday loans use them for everyday essentials like food and gas to get to work. If you’re struggling with a payday loan debt, don’t panic. You aren’t alone and there are options to help you get out of debt without taking out more loans.

2. Stop the borrowing cycle. Many people take out loans that they aren’t able to afford in the first place, and as that debt mounts, they feel the only way to make ends meet is to take out additional loans. The most important thing to do is stop the cycle of borrowing more money. Stop the financial hemorrhaging first, before dealing with the debt that’s left.

3. Cancel the automatic payday loan payment. Your other monthly financial obligations like rent, bills, food, and living costs should come as a higher priority than your payday debt, which should be repaid with money left over after covering the essentials. Your payday lender likely has direct access to your bank accounts to handle your loan repayment, but Progressive Debt Relief can help change that in order to give you more breathing room and help avoid overdrawn account penalties.

4. Repay only what you can afford. One of the biggest issues people face with payday lenders is how their collections processes are structured. You cannot be forced to repay more than you can afford, and we can help you determine what that amount is. Once we know the payment amount that works for you, we can help prove that to your payday lender.

People often take out payday loans during times of desperation, but it is critical to remember that there’s a way out – and Progressive Debt Relief can help.

We are determined to ensure you have the tools necessary to avoid future financial distress, and we strive to help you establish a debt free life with the peace of mind that comes with financial security.

Contact us today to find out more about our services, which can help you get out of payday loan debt.

If you’re researching loan options, you’ve likely noticed how many loan terms seem to be used interchangeably. Personal loans are common for people looking for a way to cover unexpected expenses, and can range in small amounts from $100 to $1500, or even more depending on the type of loan. Payday loans and cash advances are two loans which are often used interchangeably, but feature some key differences.

Payday Loans

Also called payday advances, payday loans are unsecured, meaning there is no collateral and typically no credit check required. Payday loans are disbursed based on your income, and are designed to be paid back on a date that corresponds to your paydays. They are sometimes able to be paid back in multiple installments, but a typical payday loan is paid back in a single payment.

Payday loans taken out online typically require a bank account in good standing, as funds are transferred directly into your account, and your repayment is automatically withdrawn from that same account on the due date. 

Maximum loan amounts are dependent on income, and some institutions require a minimum $1000 per month income to qualify. Those with substantially higher monthly incomes may qualify for higher loan amounts. Though payday lenders normally don’t check your credit score, there is a database available that allows them to see whether you have other short-term loans. Some lenders will deny you if you have other unpaid loans, or if you are currently in bankruptcy.

Cash Advances

Cash advance is sometimes used to refer to a payday loan in the capacity of it being an advance on your paycheck. This type of cash advance is structured similarly to a payday loan, and are designed to be repaid on your next payday or within a month.

The other popular type of cash advance is based on a credit card or line of credit instead of monthly income. Credit-based cash advances are treated like a purchase made on a credit card, so your card company’s repayment terms come into effect.

As a general rule, unsecured loans come with much higher interest rates than secured loans or cash advances done using a credit card. This is because the lender is at a higher risk for not being repaid, because you are not required to provide any collateral beforehand.

At Progressive Debt Relief, we are determined to ensure you have the tools necessary to avoid future financial distress, and we strive to help you establish a debt free life with the peace of mind that comes with financial security.

To find out more about our services, or to schedule a complimentary consultation, contact us today.

There likely isn’t a single person that would say they enjoy being in debt, but that feeling is even worse when it feels like there’s no way out. If you’re one of the 12 million Americans who take out payday loans each year, you have likely felt something similar.

If you’re in payday loan debt, there is hope – you can break the cycle of debt for good.

Why it’s so easy to get buried in payday loan debt

Payday loans are a form of unsecured personal loans that are targeted at people who need money quickly, but don’t have the means to secure a more traditional loan. The only requirements are typically an active bank account and a job.

Payday loans are structured to keep people on the hook for as long as possible. Here is a breakdown of what typical payday loan debt looks like:

· It isn’t short term – In fact, the average borrower is in debt for a full five months each year

· Fees are huge – The average borrower pays $520 per year for multiple loans of just $375

· Many borrow for the wrong reason – payday loans are meant for emergencies, but 70% of people use them for everyday expenses like gas and rent

Getting out of payday loan debt

The first step to paying off your payday loans for good is to stop the vicious cycle – but it can be tough to know where to start.

Here’s a look at some of the options commonly used to get out from under payday loan debt.

· Extended Payment Plans (EPPs) – If your loan came from a lender who is a member of the Community Financial Services Association (CFSA), you may be able to enter into an EPP to help you repay your loan. This gives you more time to repay your debt without any additional fees or interest, and you won’t be turned over to collections as long as you don’t default on your EPP.

· Credit Counseling – When an EPP isn’t an option, credit counseling may be a desirable route. Their job is to help you get out of debt, but payday loans can present a unique challenge, as they often have terms that make them difficult to work with. A credit counselor can help restructure your payback, negotiate a settlement, or adjust your monthly budget to help you make your payments on time.

After you’re free from the nightmare of payday loan debt, it is important to do everything possible to not fall back into the vicious cycle.

At Progressive Debt Relief, we are determined to ensure you have the tools necessary to avoid future financial distress, and we strive to help you establish a debt free life with the peace of mind that comes with financial security.

To find out more about our services, or to schedule a complimentary consultation, contact us today 877.590.1847.

A payday loan is a short-term cash loan based on a borrower’s personal check that is held for future deposit or on electronic access to the borrower’s bank account. The borrower writes a personal check for the amount borrowed plus any finance charges and receives cash in return. In some cases, borrowers are required to sign over access to their bank accounts in order to receive and repay a payday loan.

The payday lender holds the borrower’s check until the borrower’s next payday when the loan and finance charge must be paid in one lump sum. To satisfy the loan, borrowers can redeem the check by paying the loan with cash, allow the check to be deposited, or they can simply pay the finance charge to roll the loan over until the next pay period. Some lenders offer longer-term installment loans and request authorization to withdraw multiple payments from the borrower’s account, typically taking place each pay day.

Payday loans can range in size from $100 up to $1000, depending on the legal maximums in your state. The average loan term is about two weeks, and typically have annual interest rates of 400% or more. Finance charges average $15 to $30 for a $100 loan, making it such that a two-week loan can result in interest rates from 390% to 780%. 

At Progressive Debt Relief, we are determined to ensure you have the tools necessary to avoid future financial distress, and we strive to help you establish a debt free life with the peace of mind that comes with financial security. If you’ve fallen victim to predatory payday loan tactics, we can help.

To find out more about our services, or to schedule a complimentary consultation, contact us today.

When money is tight, a payday loan promise of fast money with no questions asked can seem attractive on paper, but is it the only option?

Data shows that 14 percent of people polled would choose a payday loan over using a credit card, personal loan, or turning to friends and family in a financial pinch. Unfortunately, the astronomical interest rates associated with payday loans often mean that people get stuck in a cycle of needing to continually borrow to stay afloat.

The good news is that if you find yourself in financial hot water, you can borrow money without becoming yet another victim of predatory payday loan practices. Here are some alternatives to consider.

Payment Plan

Before taking out a loan, you should see if there’s a way to make your situation more manageable. If a credit card or loan payment is jeopardizing your ability to pay for basic expenses, you may be able to work out a deal with your creditor. You might be surprised how much they are willing to work with you on a payment schedule.

Personal Loan

Banks have a reputation for not being the fastest, but don’t forget to consider your local financial institution when you’re in a pinch. If you need funds for a specific purpose, a personal loan can be a much more inexpensive alternative to a payday loan.

You aren’t limited to brick-and-mortar institutions however. Online lenders allow you to see what rates and terms you qualify for without performing a hard inquiry on your credit, and can get funds in your account in just a few days if approved.

401(k) Loan

Though typically not recommended if you can avoid it, tapping into your 401(k) is actually one of the most cost-effective ways to get yourself out of financial trouble. According to Investopedia, taking money out of your retirement account should be one of the first options you consider when you need short-term liquidity.

Borrowing against your retirement fund doesn’t incur taxes as long as you follow the rules, and it doesn’t require a credit check. You are free to pay your interest back on your own account, and as long as the loan is paid back within a year or so, the long-term impact on your retirement should be minimal.

Borrowing money on short notice is never an ideal situation. Sometimes things happen that are out of your control, and it is important to be as smart as possible to avoid the sky-high costs of a payday loan.

We are determined to ensure you have the tools necessary to avoid future financial distress, and we strive to help you establish a debt free life with the peace of mind that comes with financial security.

To find out more about our payday loan consolidation services, or to schedule a complimentary consultation, contact us today.

Cash advances can be a convenient way for credit card users to get money when you need it most, but they can quickly become a nightmare if you don’t know the exact terms and conditions of what you’re agreeing to. 

Here are a few things to be aware of if you are considering a cash advance.

The Number of Fees

Cash advances are often promoted as a convenient way to quickly access cash in an emergency, but these transactions are often accompanied by a convenience fee, and an ATM fee may apply if the cash is withdrawn from an out-of-network unit. 

High Interest Rates

Another thing to keep in mind with cash advances is the high interest rate associated with them. Percentage rates for cash advances are typically higher than – and sometimes even double – the percentage rate for purchases on a credit card. This helps credit card companies generate revenue as many borrowers are not aware of the high interest rates, and are under the impression that they are treated the same as everyday purchases.

No Grace Period

Unlike most credit card transactions that offer a grace period before interest begins accruing, cash advances do not. Your balance will begin to increase immediately after the transaction is processed.

Encourages Poor Spending Habits

Cash advances make it easy to fall into irresponsible spending habits. For example, if you want to purchase something from a merchant that only accepts cash, you may be tempted to head to an ATM to make a cash withdrawal with your credit card. However, failing to immediately repay the balance and corresponding fees can result in a mountain of debt, especially if done multiple times.

Because of the dangers associated with cash advances, it is best to find other options, or at least thoroughly consider whether or not you will be able to immediately repay the balance before taking one out. 

We are determined to ensure you have the tools necessary to avoid future financial distress, and we strive to help you establish a debt free life with the peace of mind that comes with financial security.

To find out more about our services, or to schedule a complimentary consultation, contact us today.

Most  financial services or transactions have the ability to hurt your credit score if managed poorly.  

When it comes to payday loans, most lenders do not pull your credit to approve you for a payday loan, and these lenders do not report the loan, payment, or default of the loan to the credit bureaus. The trouble happens if the default is turned over to a collections agency. Then, it ends up on your credit report and can hurt your score for up to seven years, even if you pay the collections amount or any judgement against you.

According to consumer watchdogs like the Federal Trade Commission (FTC), this isn’t the most hurtful aspect of payday loans.

How payday loans can hurt your credit

Even though payday loans typically do not show up on credit reports from major agencies like Equifax, Experian, or TransUnion, there are some specialty credit reporting agencies that can collect payday loan history and make it accessible to lenders so it could affect future loan approvals.

If you fail to repay your loan and the debt is sold to a collection agency, they typically do report accounts in collections to the major credit bureaus, which would in turn hurt your credit score. Additionally, if any collections agencies or payday lenders take you to court over unpaid loans and fees and you fail to appear or lose the case, this information will also be recorded on your credit report and impact your score for up to seven years. 

Payday loans effectively make each of your paychecks smaller as you work to pay back the amount borrowed plus any associated fees, making it increasingly difficult to get out of the payday loan trap and pay your monthly bills based on your actual income.

Let us help you 

When you’re struggling with payday loans or other debts, a debt assistance and credit counseling program can provide the tools you need to get back on your feet. Here at Progressive Debt Relief, we will walk through your financial situation, provide you with advice, help create a plan to suit your needs, and can even help settle payday loans and other unsecured debt.

We are determined to ensure you have the tools necessary to avoid future financial distress, and we strive to help you establish a debt free life with the peace of mind that comes with financial security.

To find out more about our services, or to schedule a complimentary consultation, contact us today.