A number of these services cost more than their worth and dig into your pocket or purse primarily. While a number of these services are targeted at people with limited funds and are  but  short of cash and credit, it’s tempting to use some of these services and to buy things at higher cost than if you had the money to spend when you shop.

Money

• Credit card companies that charge excessive late payment fees or over-the-credit limit penalties. Sites like Credit.com enable comparing credit cards.
• Pawnshop loans have the advantage of defaulting in repaying the loans does not hurt your credit store. The pawnshop keeps what you’ve pawned whether it’s jewelry or a musical instrument, but this comes at a price of monthly interest ranging between 5% to 25%. Pawnshops are regulated by federal, state, and local laws and ordinances.
• Payday loans that are unsecured advances on a paycheck. A $15 charge amounts to an annual interest rate of 390%.
• Rent-to-own stores used for items like furniture, computers, electronics, and appliances  While the monthly cost is less than an conventional loan, the term is longer and you wind up paying more.
• Subprime mortgage loans cost more than conventional ones to compensate for the additional risk involved in lending to someone who has credit problems, like failing to pay debts completely, a history of late or missed payments , excessive debt, or little in the way of a track record of using credit.
• Tax refund loans are secured by anticipated tax refunds. These convenient loans are expensive.

Housing

• Seeking a loan for buying or refinancing a home with a subprime mortgage lenders. You’ll pay more.
• Renting to own a home. Most people never actually buy the house and have paid more than people who enter a straight rental, particularly if they agree to make repairs.

Autos

• “Buy-here/pay-here” used car lots. Whether buying a new or used vehicle, stay in control of the negotiations by (1) negotiating a purchase price instead of a monthly payment. If the dealer knows what you’re capacity to pay monthly is, they will find ways of adding to your cost. (2) You’ll likely pay less for a loan if you obtain it yourself rather than going through the dealer. (3)Before accepting a cash rebate, compare it with the interest-rate if you are obtaining a loan.

Cell Phones

• Cell phone providers that force less creditworthy customers into expensive prepaid plans.  Avoid unnecessary charges by taking into account you are using minutes in checking for voice mail, roaming when you travel in other countries – you can upgrade your services for the length of your trip, being careful about clicking on spam text messages that result in your being a cramming victim and then getting barraged with ads. The The Federal Communications Commission offers tips to avoid cramming. Keep in mind that you pay for texting messages and can run up large bills.

For an initial free consultation on this and other topics or to explore this or a sustainable livelihood that bests suits your personality and your community, contact us.

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