Mapping Your Financial Journey: Helping Adults Plan for College
Money Pitfalls

Financial "Fixes" to Avoid


These “easy money” options may seem like convenient ways to get things you need, but they have financial risks that are best avoided.

  • Check-cashing stores charge fees for cashing checks—up to $8 in fees for each $100 cashed. Cash checks at your bank for free.
  • Payday loans are sometimes offered by check-cashing stores to students who work part-time or have income from scholarships or grants. You write a post-dated check for the amount you want, plus the store’s fee. For example, if you want $200 now, and the store’s fee is 25%, you write a post-dated check for $250. If you don’t return to the store to re-pay the $250 on your payday, the store can redeem your check.
  • Money orders can be used to pay bills instead of using checks, but there’s a fee for each one. A checking account, even one with monthly fees, usually costs less than using money orders.
  • Pawnshop loans generally will get you less than half of what your item is worth. You’ll make more money by selling items yourself through classified ads, on eBay, or at www.craigslist.com, a free site in most states.
  • Auto pawnbrokers hold onto your vehicle’s title in exchange for a loan. If you miss a payment you could lose your car.
  • Rent-to-own stores offer furniture and appliances for a small weekly rental fee and promise that a portion of payments will be credited toward your purchase of the item. But the ultimate price could be three to 10 times more than the item costs new!

 

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