Cash Advances & Overdraft Fees
Some recent Federal legislation makes cash advance payday loans a better consumer alternative to bank overdraft fees. Thanks to a new law called Regulation E, banks must now alert their customers when an ATM withdrawal or debit transaction will overdraw their account. The bank presents the customer with the option to continue the transaction with an additional overdraft fee or to cancel and have the card declined. The new regulation may create an increase in online payday lending as customers look for alternatives for making purchases without overdraft fees.
Consumers are not always aware when their accounts are in danger of going overdrawn. Landlords don’t always deposit rent checks right away, and some payment transactions can take several days to clear the bank. There are a number of reasons your balance can dip lower than you expected without your knowledge, especially if you wait to balance your check book until your monthly bank statement arrives. Instead of the balance you expected, your account is several hundred dollars in the hole due to overdraft fees charged for every day your account was overdrawn. Regulation E changes this frustrating scenario entirely, requiring your bank to alert you as soon as your balance goes too low.
Instead of completing the transaction and suffering the high-cost consequences, consumers have the option to cancel and borrow a cash advance loan to make the purchase instead. Online cash advances have significantly lower interest rates than bank overdraft fees, especially when paid in full on time. A bank may charge $35 every day on an account that’s overdrawn by only $5. Compare that cost to the cost of a $100 cash advance with a one-time $15 service fee for up to 30 days. The savings are easy to see.
Stop being bullied by bank fees. If your account is about to be overdrawn, cancel the transaction and save yourself some extra cash by borrowing cash advances online instead.
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