Many Americans work hard for what they have. A lot of effort goes into building a strong financial foundation for a family. People save and invest, as well as protect what they’ve built up with insurance policies. Most folks have some idea of how to protect their money. Yet, we sometimes let our guard down and end up paying for it later, often literally. Below are some things we should look out for when it comes to money.
Watching your account balance seems like basic knowledge yet, many of us have faced overdraft fees. In fact, banks make billions annually off of these charges. If you are hit with an overdraft fee, and don’t realize it, you could face up to between five and ten dollar daily fees until the overdraft charge is paid off. You would have been better off getting a payday loan.
If a savings account or credit card is linked to a checking account to cover any overdrafts then you’re covered. It’s when in case of insufficient funds, the bank will cover your purchase while sticking you with an overdraft fee that things get messy. Overdraft charges average around twenty-seven dollars per occurrence.
So, if you stop by a gas station, overdraft by a dollar on a twenty-one dollar purchase at the pump, go inside and overdraft again on a dollar coffee, you’ll owe the bank fifty-six dollars based on the average fee. If you wait until the next day, that might become sixty-one to sixty-six dollars. It can add up fast.
Third-party payday lenders
Payday loans have become a popular way to borrow money over the years. They offer a fast way to borrow small sums over a short period of time. Many do not require a specific FICO credit score rating in order to qualify. Many direct lenders offer loans and profit off of interest as is normal. What an individual wants to look out for is the third-party lender.
A third-party lender is a “middleman” for an actual lender and the borrower. Third parties usually earn a fee tacked on to the loan offered by the actual lender or make commission for driving business to the original lender. This leads to some third-party lenders discovering less ethical ways to profit.
Third-party lenders have been known to sell personal information to other lenders or businesses. These other businesses give money for information on people who have been known to borrow so they can offer them additional services or products (after all, since they got a loan, they have money to spend now, right?).
Such offers frequently come in the form of unwanted email spam and constant telemarketer calls. If you’re thinking of getting a payday loan use a direct lender and skip the “middlemen”.
Dealing with unknowns
Unknown is a broad term but, what this article refers to as unknown are people on the telephone and websites that offer no proof that they are who they say they are. Most of us have received calls from businesses we have dealings with, telemarketers, and charities. While not nefarious by default, there’s a lot of opportunity for fraud and identity theft to be committed over the phone.
With businesses you know, make sure the caller is actually affiliated. They should know certain information about you so, if they ask for too much info, you can always say you’ll call them right back and use that institution’s number from your records to ensure the call came from them and not someone trying to obtain your personal information.
Telemarketers can be very convincing, especially when they claim to represent charities. Unfortunately, this is also a good mechanism for devious scammers to profit from victims with good intentions. Sometimes it’s best to have the caller mail a request or information. Make sure a return address is included.
Check online for a website to further validate that the business or charity exists. You may even express that you prefer to go through the website to order or donate rather than give info over the phone.
When ordering or donating online, be sure a site is secure. Look for a lock symbol next to the URL and make certain that the URL begins with https (not just http) on any page where you fill in personal information. Additionally, make sure the site shows a phone number and physical address (most likely shown on the home page or in the footer).
Another way to avoid scams is to ask a person on the phone to call back later giving you time to look their offer or charity online. Many people post warnings of popular scams and what they were asked or told so you can see if that correlates to your situation. Charities can be looked up and there are groups that gauge how much money actually goes into helping people.
Sometimes it’s easier to disregard the warning signs or to try to look for the best in people, and often that’s fine but when it comes to your finances, stay strong and ask the tough questions. Be diligent and remember, if everyone stays vigilant these financial pitfalls stop being profitable. When these financial pitfalls stop being profitable, people who utilize said pitfalls stop using them to take advantage of others.