The main reason why “low fee” payday loans can end up costing you every bit as much as other high interest personal loans is pretty simple: because they can turn you into a repeat customer if you feel that the lower payment makes it less dangerous for you to take out the loans.  Payday loan providers depend on people visiting them on more than one occasion, and they know that even if they charge a low fee, they will probably make up the money in the long run when you return to them for yet another loan (or refer a friend or family member to them).  And sure enough, like clockwork, some of those same loan providers who had low fees for you the first time may welcome you with higher interest rates now that their “special introductory” offer has expired.

So be careful the next time you find yourself being tempted by these “low fee” payday loans that are being promised on the corner.  No matter how low a fee is, it’s never worth the damage it does to your credit report and future earnings potential.  Most people who take out payday loans don’t really need them for a legitimate emergency anyway, so it might be best to ask yourself whether or not you really need the cash right away, after all.  Good financial planning means you’ll have plenty more to spend in the future on the things that really matter, like your family!

Payday loans are insidious not only because you always lose money when you get an advance on your paycheck; they also can be addicting, and there are plenty examples of individuals who throw away a substantial portion of their salary every year by taking out payday loans.  The lenders themselves make it as easy as possible to get as many payday loans as you want, since it’s in their best interests to charge as many fees as possible.  But while it’s great for them, it isn’t good for your pocketbook or for your credit report. 

If the average payday loan customer actually put into a savings account all of the money that they wasted on loans each month, they might actually build up a rainy day fund that could remedy any financial emergencies they might be faced with.  By staying clear of any kind of high risk personal cash advances, you can eventually heal your credit to the point that you’ll qualify for some more legitimate, safer loans with even smaller interest rates and fees.  The next time you are tempted, ask yourself: would you rather have another payday loan or get approved for a mortgage on a new house?  It’s up to you.  

The reason why low fee payday loans can be so addicting is that when you get into the habit of getting your paycheck earlier than you should every month, you start counting on that money on a certain date to pay for genuine expenses or just recreational expenses.  It can be fun to get money early to purchase something fun that you’ve had your eye on, but when you start abusing payday loans, you’ll find that it will start to get more and more difficult to pay for the real necessary things like rent, mortgage, food and clothing.  And there’s where the real trap is revealed when it comes to payday loans.

Let’s talk for a minute about the differences between legitimate emergencies the call for payday loans and unnecessary spending.  Real cash emergencies involve paying for problems with unforeseen medical bills, lack of money for food or rent, and a very few other exceptions.  A legitimate financial emergency does not include new electronics, concert tickets, or even keeping the cable turned on in your house.  If it doesn’t involve keeping you and your family safe and alive, that isn’t really an emergency, and taking out low fee payday loans to pay for it is probably not the best decision in the world.

Believe it or not, it’s that very reasoning that allows people to ascertain the difference between necessary and unnecessary spending that spells the difference of wasting money on low fee payday loans and saving money for a better financial future.  If you can just tell the difference, you’ll be much less likely to take out a payday loan and adversely affect your bank account and credit score.  Having said that, however, there are also some people who do understand these differences but still take out payday loans anyway.  To tell the truth, if you’re one of those people, I doubt there is much anyone can really do to help you much.

But if you do want to work hard and build a better future for yourself and your family, then going the route of payday loans is definitely not the choice you want to make.  Instead, start planning ahead by putting a bit of money into a separate savings account every month, creating a fixed and realistic budget to follow, and watching your non-essential spending.  It’s find if you’ve taken out low fee payday loans in the past, but you need to forget about those kind of high-interest personal advance loans if you really want to turn things around.  And hey, there’s no better time to start than today!

The reason that the myth of low fee payday loans has been able to circulate so successfully is an inability from the populace at large to distinguish real, legitimate financial emergencies from impulse buys and impatience.  Why wait for your paycheck when you can get a payday loan today and have money in your hand immediately?  The problem with this, of course, is the fact that lenders charge a portion of your paycheck in order to give you that cash early, and regardless of what they charge, there are no low fee payday loans out there.  Any fee is too much.

On top of the fees that most payday loan providers charge, there is another bad consequence to taking out personal loans to pay for impulse purchases.  Most people who frequent payday loan providers have bad credit in the first place, and taking out even low fee payday loans will do nothing to improve your score, in fact it may even lower it!  This is why we are adamant that payday lenders are definitely not a good idea for the average worker, regardless of what kind of financial troubles you are having.  And the first step in avoiding the mistake of taking out a high interest loan is to make sure that you have money set aside for a rainy day in the first place.

Setting yourself an intelligent, manageable is easier than you think, and it will help you avoid the pitfalls inherent in low fee payday loans.  To begin, write out a simple list of your predictable monthly expenses, everything from bills to entertainment.  After you’ve figured out how much you spend each month, look at your income and figure out how much extra cash you have left at the end of the month to put into a savings account.  Remember: people with a healthy savings account will probably never need to take out low fee payday loans, and that’s where you want your finances to be.

Don’t just take our word for it that low fee payday loans are really a myth that is exploited by lenders to take your hard-earned paycheck and give you back less than you deserve.  There are plenty of other references all over the Internet that will warn you about the many dangers of taking out payday loans, and it would serve you well to heed the warnings.  By paying better attention to your own finances and making sure you are responsible with your savings account and spending, you can make sure that you’ll never have to take out any payday loans at all.