Random Thoughts: Money, and the care and feeding thereof

[lagilman]

Had a discussion with Tax Guy over the weekend about the "instant rebate" offer most tax preparers offer these days, and I mentioned the infamous J.G. Wentworth ads tht run constantly in this part of the country, offering cash for structured settlements, plus the "advance against payday" ads you see on the subways and in various other places.

Now, I know I'm a relatively educated consumer when it comes to my money, but I admit to being baffled by people who think to 'take advantage' of these deals without realizing that they're the ones being taken advantage of, by the inevitable rates they'll be charged on these 'loans,' most of which eventually pile up to be multiples of the original sum. Seriously -- the rates they charge? Makes credit card debt seem like a good idea.

And yet, people sign away endless papers saying they understand that they're going to get hosed, and take the very expensive insta-money* rather than waiting the week or three for a refund/paycheck/payment that will already be eaten up in interest payments by the time it arrives. Is a puzzlement.


ETA: as I say in the comments, if you're living paycheck to paycheck, you can't afford to take these so-called loans, because it will sink you even further in debt. But people see 'insta-money' and jump, rather than stopping to think, and saving themselves trouble a step or two down the road.



*unless you have an Offensive and Un-PC Sterotype type waiting for you outside with a baseball bat, in which case any kind of insta-money is cheaper than medical bills. But in that case, you've got to start reading the small print waaaaay earlier, 'k?

Comments

[going-not-gone.livejournal.com]

Loansharking....it's not just for thugs anymore!

Look up the definition of usury in the dictionary sometime, and compare it to the fine print on almost any credit card agreement. There's remarkably little difference. But the concept of delayed gratification is pretty much dead in our society.

It's scary if you think about it. Which is why most people don't. Well, that,and the fact that a large percentage of them are dumber than a box of rocks, and thinking makes their heads hurt.

[jonquil.livejournal.com]

Many Americans are living paycheck to paycheck. Look at the ubiquity of check-cashing stores that offer loans *against your next paycheck*, and charge usurious interest because in theory the loan is only for two weeks, although in practice they are generally rolled over.

[lagilman]

But that's exactly my point. If you're living paycheck to paycheck you can't afford to take these so-called loans, because it will sink you even further in debt. But people see 'insta-money' and jump, rather than stopping to think, and saving themselves trouble a step or two down the road.

And it happens even to people who aren't living hand-to-mouth.

[(Anonymous)]

But if you literally can't pay the rent without the paycheck loan, there is no long-term. The short term is such a crisis that there's no point in worrying about the next month.

It's not just short-sightedness; it's desperation.

[jonquil.livejournal.com]

Sigh. That anonymous was me.

Pawnshops, for instance, aren't just a sign of shiftlessness by the poor; they're a symptom of a class of people who don't have enough money to get by. The pawn shop was the older form of the paycheck loan: you'd pawn your watch to make it through to the next infusion of money.

okay, before we go further down that road...

[lagilman]

Nowhere did I reference shiftlessness or class distinctions. In point of fact, all I said was that, in purely fiscal terms, these choices were bad ones, especially if you're in a paycheck-to-paycheck situation.

And a pawn shop is a wiser choice than a paycheck loan -- you might have to pay more to get the item back, but yu didn't HAVE to redeem it. And the price didn't compound daily.

[(Anonymous)]

It's far more effective to work with your creditors rather than adding high interest creditors on top of the ones you already can't pay. Speaking from experience, most landlords and utilities and etc. are generally willing to work out payment plans if you talk to them about where your finances are and when you can pay them. They'd generally rather get paid slower than cut you off/kick you out and not get paid at all. But people seem to rarely think of that as an option. I know way too many people who just ignore their debts rather than trying to deal with them.

[rovanda.livejournal.com]

Oops, didn't realize I wasn't logged in. That was me.

[allaboutm-e.livejournal.com]

Plus it seems to me that these sorts of places have really proliferated over the past, say, 6 years -- a comment on a) the economy and b) the intelligence of the average American citizen, perhaps?

[greeneyedkzin.livejournal.com]

It would certainly be kinder, if far less fun, to replace "intelligence" with "anxiety." And I suspect it would be more accurate, too.

[lagilman]

Fun? Sadness and cynicism, perhaps, but I didn't get any sense of 'fun' from the comment. What did I miss?

[greeneyedkzin.livejournal.com]

Oh, just the usual "we're smarter than the average American." Whether from someone from the U.S. or someone from outside the U.S., I find it a trifle wearying. I have enough sadness and cynicism to tote around these days.

[allaboutm-e.livejournal.com]

It might be more accurate -- my sense of faith in humanity is not too high today.

[(Anonymous)]

I'm in the throes of a truly Clauswitzian job hunt and watching BABYLON 5 to keep my courage up.

"Hope," as Lorien says, "is all we have."

[allaboutm-e.livejournal.com]

:: sending positive vibes for a good outcome ::

and thanks for the perspective

[housellama.livejournal.com]

I'm ashamed to say I used to work for Advance America, which is one of the largest "Cash advance" places around. However, compared to most they are actually one of the more legit. This isn't saying much however.

I did in house tech support for them, but working for the Devil is working for the Devil, no matter how you do it. At least I wasn't at the stores taking the poor folk's money personally, or god forbid in the marketing department.

-Tug