Payday loans: what not to use them for

OK, so you’re out shopping and you see the perfect pair of shoes. Suddenly, the other 300 pairs of shoes in your closet simply won’t do. You need those ones. And they’re (gasp!) on sale! You’ll never be able to get a better deal, and if you don’t hurry there’s no way you’ll ever be able to get a pair in your weird assed size anyway. Time to go get payday loans, right? Right?

Bzzzzzzzzt! Thanks for playing, the answer is no. There are some things in life that might merit paying enormous interest rates because they simply cannot wait until payday, but shoes (sorry, ladies) are not one of them.

Don’t get us wrong. We understand. That’s the only pair of shoes that could ever possibly go with the little black dress you bought with payday loans last month, because, of course, it was the only little black dress that could possibly ever make you look as thin as you want to look. OK, maybe not quite as thin as you want to look, but it’s as close as you were ever going to get.

Here’s the thing. If you take out a payday loan, you’re going to pay it back with 9%-14% interest in most cases. And that’s simple interest due in less than two weeks in most cases. If you factored it into annual percentage rates (APR) that banks use when giving loans, the interest rate is usually between 300% and 400%. And that’s a lot for a pair of shoes. Or a dress. Or anything, really.

There are some things in life that come up that absolutely, positively need to be taken care of right away. If your income depends on something (like reliable transportation) and you stand to lose more by refraining from taking out payday loans that you would lose by taking the loan out (and re loaning, in most cases), then fine, go ahead and do it. But, here’s a hint: none of those kinds of things have anything to do with shopping.

If you’re an impulse buyer, stay away from stores when you don’t have cash. Don’t even window shop. Trust us, you’ll be able to actually buy a lot more in the long run if you show some restraint now. And, believe it or not, you will eventually find a pair of shoes to match that dress when you actually have the cash to buy them. They might even be on sale.

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