Payday Loan Blog

We were talking about the hidden dangers of debit cards. Here’s another: out of order transactions. This is how this works: your account is not debited in the order you charge or deposit amounts. Instead a bank will process your biggest debit first, then if you’re out of money you’ll get charged a fee for every debit you make after. If they took out the smaller amounts that you charged first, you’d only get a fee for the last charge.

So now a bank can charge you 4 overdraft fees – and they add up fast. Chase Bank decided to stop doing this and hopefully other banks will too.

What should you do? First, check to see how your bank processes debit overdrafts. Change banks if you need to.

If needed, consider a payday loan. A payday loan is more cost-effective than risking fees on your debit card. If you’re cutting it close, put a cushion there. Payday loans are more reasonable than debit card fees if you pay the loan back in the agreed-upon time (2 weeks usually).

People often talk about the high interest rates of payday loan companies. I read an article in Parade magazine about the high fees of debit cards. You get these fees when you spend more than you have in your bank account. With the holidays approaching it’s easy to come up a little short when you swipe that card.

Listen to this. Many banks provide overdraft protection even if you don’t request it — and charge you for it. It’s common to be charged $39 every time you exceed your limit. So let’s say your bank account goes to zero and you make 5 purchases with your debit card. You will be charged $195. Ouch.

It’s a lot cheaper to get a payday loan to cover you for a week or two. It’s fast and easy and you don’t even have to leave your home. You can apply online and have the money direct deposited into your account within a day.