You can still get credit if your finances are a mess. It will just cost dearly. A sweeping credit card law that took effect yesterday is supposed to prevent banks from employing tactics that push borrowers deeper into debt. Yet loans and cards with crushing terms still beckon.
Lenders serving risky borrowers say high fees and interest rates are necessary because their customers are more likely to default on loans. President Obama is pushing for a consumer protection agency that would oversee such products, but its fate is uncertain.
Here’s a look at three common resources for strapped borrowers:
■ Payday loans. Their widespread presence makes payday lenders easy to turn to in a pinch; about 19 million people did so last year, according to industry figures.
Consumers give the lender a postdated check for the amount of the loan plus a fee, usually $15 or so for every $100 borrowed. The lender holds the check for about two weeks, at which point the money is repaid or the check is cashed. In some states the loan can be rolled over for another fee.
The fee is easy …
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March 28th, 2010 at 7:34 pm
The rate at which people are taking loans since the turn of the millennium has tripled perhaps due to the ease of application with banks embracing information technology such as the internet and mobile phones. However, the most important cause must be the boom of real estate practices.