Many of these outfits prey on people want to improve their finances, which adds insult to injury.
In reality, itrarely works out this way.
In the U.S., borrowers pay$7 billion annuallyin payday loan fees.
Before you sign your life away on a payday loan, first check out the alternatives.
Ask your employer for an advance.
Ask if your company offers any hardship programs.
Almost anything is better than a payday loan.
Credit unions are a solid alternative, too.
Some credit unions also offer signature loans, which are aimed at people with bad credit.
TheNational Consumer Law Centerlists some specific credit union loansin their Payday Loan report (PDF).
Services likeKivaandLending Circlesoffer loans peer-to-peer lending.
I had to pull my credit report, but I wasnt sure where to start.
Then I remembered a commercial Id seen for freecreditreport.com.
This happened a long time ago, but people still get duped.
In fact, a recentthread on Reddit Personal Financebrought it up again.
As that Redditor pointed out, you never have to pay to check your credit reportor score.
You get a free copy of your report every year from each of the three major credit bureaus.
You shouldnt have to fork over your credit card to get a copy, either.
Debt Consolidation
People turn to debt consolidation because they want to be responsible.
Unfortunately, though, more often than not, debt consolidation isnt a good option.
For one, debt consolidation stretches out the term of your debt.
If all it took to get rich was going to a free seminar, everyone would be rich.
Youve probably heard of these, too.
If its not real estate, its some other get-rich-quick pyramid or Ponzi scheme.
You go to the free meeting (maybe you even get a free T-shirt!)
These have been going on for ages, but people still fall for them.
The problem is, a lot of these gurus lure people in with legitimate, sound personal finance advice.
Robert Kiyosaki is a recent example.
The problem is, the book probably isnt real.
Its more a myth, like Harry Potter, as Kiyosaki himself put it.
But, okay, the lessons are still good, right?
Youre not going to learn anything.
But I think most people were a little afraid to say anything.
It was very intimidating.
So how do you separate the legit experts from the frauds?
There are a lot of different types of financial service professionals, and not all of them are legit.
The scammers ride the coattails of the accredited ones.
This is called a Misrepresentation Scam.
Its quite easy for someone to hang up a shingle and start doling out advice.
When you hire a financial professional, double-check they have the credentials that matter.
This means they cant sell you a bunch of sketchy investments just to earn a commission.
you’re able to also use theNational Association of Personal Financial Advisorsdatabase to find highly-rated, legitimate professionals.
Credentials are just a start, though, and they dont necessarily make a good money manager.
You still want toask the right questionsand do your research.
Illustration by: Sam Woolley
