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Pay Bills

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Paying your bills is an important part of becoming an adult and a good money manager. Pay your bills as soon as you get paid and mail your payments immediately. Also, check with your financial institution or some service providers (such as cell phone companies) about online payments or setting up automatic payments. However, carefully monitor your direct payments to ensure that you have the money in your account to cover the expenses as well as to oversee that the correct charges are made to your account.

Payday Lenders, Cheque Cashing Services, and Car Title Loans

Quick fixes–offers to help you with your money problems–are usually "money traps". Pawnshops, payday lenders, and cheque-cashing stores offer fast cash in convenient locations. However, they often end up costing you more money–and potentially putting you deep into debt.

  • Payday Lenders make loans to people who have both a chequing account and a job or are receiving government benefits. The borrower (person who needs the money) writes a "postdated cheque" to the store. "Postdated" means that they put a future date on the cheque-the date the borrower will be paid next. If the person needs $100 in cash right away, the cheque (which includes interest) might be for $125. The payday lender gives the person cash immediately. Then, on payday, the store cashes the check. That quick $100 cost the person an extra $25 on payday. Plus, the person has $125 less to spend now and that can be a real pinch. Often, borrowers are tempted to get another payday loan to cover their current expenses winding up in a never-ending cycle of debt. What is worse is that some payday lenders charge as much as 300 percent in interest!
  • Cheque-cashing stores charge fees for cashing cheques. The fee usually is between 1.5 percent and 8 percent for every $100. For example, if you give them a $100 cheque, you may pay $8 to have your cheque cashed. So, instead of getting $100 in cash, you will only get $92. In contrast, people with accounts at financial institutions or banks usually are not charged a fee to cash a cheque.
  • Car title loans are offered by many pawnshops and cheque-cashing businesses. In return for these loans, you give the lender some information about yourself–and the title to your car. The amount loaned usually is only a small portion of the value of the car. If you miss even one payment, you could lose the car–and all of your payments.


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