Sister wants to know: Payday loan or overdraft protection?

CZroe

Lifer
Jun 24, 2001
24,195
856
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My sister already owes me $100 and I have nothing left to loan her but she has a payment due today and can pay everything back on Friday (two days from now).

What normally makes more sense: Getting an overdraft protection fee of $30 and having it charged to your credit card at the cash advance rate and having it stuck on your credit card balance until it's paid off years from now or getting a payday loan and paying the high fee (whatever it is)? I've never gotten a payday loan so I don't know what kind of fees are typical for borrowing ~$200 (in CA), but if it's comparable to the typical $30-$60 overdraft fee, it would probably make more sense.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
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Oct 30, 2000
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Most of the Check cashing locations will charge 20&#37; of the amount borrowed with the agreement that it is repaid within one payday.
 

LucJoe

Golden Member
Jan 19, 2001
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My sister already owes me $100 and I have nothing left to loan her but she has a payment due today and can pay everything back on Friday (two days from now).

What normally makes more sense: Getting an overdraft protection fee of $30 and having it charged to your credit card at the cash advance rate and having it stuck on your credit card balance until it's paid off years from now or getting a payday loan and paying the high fee (whatever it is)? I've never gotten a payday loan so I don't know what kind of fees are typical for borrowing ~$200 (in CA), but if it's comparable to the typical $30-$60 overdraft fee, it would probably make more sense.

What would happen if she just doesnt make the payment until she has the money on Friday?
 

dud

Diamond Member
Feb 18, 2001
7,635
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Payday loans and anything having to do with companies like Cash America are basically (unbelievably legal) predatory lending institutions that prey on those who can least afford credit ... the poor.

I don't know your sister or her situation but tell her to keep her money in her purse and DO NOT ... I repeat DO NOT take out ANY payday loans.

Don't let her become a victim ...
 

CZroe

Lifer
Jun 24, 2001
24,195
856
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Get the overdraft fee. Payday loans can be as high as 90&#37;. Seriously.

I know CA is pretty strict and I think they have a $235 limit or something. If the fee is something like $35, I can see it being the better option.

What would happen if she just doesnt make the payment until she has the money on Friday?

Automatic overdraft protection. $30 per $100 overdrafted so likely two charges, $60 total, plus that $60 would be on the credit card at the cash advance interest rate (much higher than purchase APR).
 

CountZero

Golden Member
Jul 10, 2001
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I don't know the answer to this but does either of those options show up negatively in a credit report?
 

dank69

Lifer
Oct 6, 2009
35,550
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What would happen if she just doesnt make the payment until she has the money on Friday?
Automatic overdraft protection. $30 per $100 overdrafted so likely two charges, $60 total, plus that $60 would be on the credit card at the cash advance interest rate (much higher than purchase APR).
I don't think you answered the question. At least not clearly. Is the payment automatically deducted from her account?

EDIT: Pics of sister to determine best course of action.
 
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Krazy4Real

Lifer
Oct 3, 2003
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Is the payment absolutely due today? A lot of times there is a grace period. She can also probably just call the company and tell them that they will get paid on Friday when she gets paid.
 

PowerEngineer

Diamond Member
Oct 22, 2001
3,557
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As you made a point of mentioning that she already owes you $100, I'm guessing that her bigger problem might be keeping her spending under control. It sounds like she might be back in a similar (or worse) situation before her next pay day comes along. Getting to a point where you even start considering a "payday loan" is IMHO a very bad sign.
 

CZroe

Lifer
Jun 24, 2001
24,195
856
126
OK, I see that the typical fee for borrowing $200 in CA is $35. Because there's a $25 referral fee that I can recoup from her (she's used them before), I can do it and pay only $10.

I don't think you answered the question. At least not clearly. Is the payment automatically deducted from her account?

EDIT: Pics of sister to determine best course of action.

Yes. That's how it would trigger it automatically.

Don't assume she's young.
http://www.youtube.com/watch?v=OhAjYnU-1So
She's 41.
 

SamQuint

Golden Member
Dec 6, 2010
1,155
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Be tough, tell her to live like an adult and live within her means. If she has no cash reserves at age 41 she is in serious trouble. What happens when she retires? Future does not look bright. Tell her to take her posessions down to the pawn shop and sell them. I am sure that she has some valuables that she can part with to pay off her debt!
:whiste:
ok, just kidding...

Some people will never learn. Just don't enable her by giving her any more money. Let her get herself out of this situation. Maybe she will figure it out before too long.
 

ShawnD1

Lifer
May 24, 2003
15,987
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Payday loans are for people who cannot get credit cards.

Credit card is much cheaper than payday loan or overdraft.
 

Texashiker

Lifer
Dec 18, 2010
18,811
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Credit card is much cheaper than payday loan or overdraft.

Credit cards would further drive her into debt.

Tell her to pawn something. If she can get it out of pawn in a couple of days that is great. If she looses the item, then it does not hurt her credit.
 
Jun 27, 2005
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Just pay the bill a couple of days late. Nobody reports a late payment until 30 days past due. Why is this so hard?
 

DominionSeraph

Diamond Member
Jul 22, 2009
8,391
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Does she have anything she can pawn? At least then she wouldn't be on the hook for extravagant interest fees, and she'd probably be more likely to save to get back her goods than to pay back a paper debt.
 

Nintendesert

Diamond Member
Mar 28, 2010
7,761
5
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Maybe I missed it, but who does she owe money to that she can't call up and try to get a short extension on her due date until she gets paid?

And if that's your sister in that video, tell her to sell the damn dogs, the couch and the guy's watch.