Picture this: it’s the first of the month… your bank account is near empty… and rent is due.
So… you go to a payday lender to fill in the gap until you get paid… but then your car breaks down and you have to borrow again… digging a hole of debt that’s hard to get out of.
These scenarios happen to millions of Americans each year… but I’m here to help you not make a tough situation into a financial disaster.
In this video, I will tell you what predatory financial services to watch out for… how they operate… and better solutions to save you both money and stress.

Predatory services deceive or exploit borrowers to get them to accept unfair or abusive terms on loans that they don’t need, want or can’t afford.
Payday loans or cash-advance loans for example… are usually short-term loans you are supposed to pay off in about two weeks.
You get quick cash with no credit check and very little asked… which might sound good when rent is due or your car breaks down… but the reality?
High fees equaling between 300-to-800-percent APR make paying it off difficult… and if you can’t pay it back in time… they will gladly extend your loan… for additional fees.
These businesses say that they are filling a short-term need that banks and credit unions are not.
This may be true in some cases… but not all of them.
The truth is more than 80 percent of payday loans are reborrowed within a month… and according to the Consumer Financial Protection Bureau… one out of every four are reborrowed nine times or more!
That means a lot of borrowers are paying more in just fees than the amount they borrowed in the first place!
They make more money when people have a hard time repaying their loan and they are counting on it.
Not only do they prey on those who don’t have many options and need quick cash...
Some also prey on those who work but don’t have mainstream financial services.
Payday loan businesses may also offer check-cashing services for a fee for people who don’t have a financial institution.
It might be a charge of five dollars for every hundred dollars cashed… but if you think about it… that’s 50 bucks just to cash a thousand-dollar check.
If you’re paid every two weeks… that’s 1,300 dollars a year!
Most credit unions have savings or checking accounts that allow you to cash a check for free… and if you have direct deposit, you save both money… and time you’d normally waste going to these predatory businesses.

To get money fast… some people also turn to pawn shops by handing over jewelry, electronics, and other valuables… and taking a loan against them.
They draw people in by advertising loans with no credit check… and may use pressure to close the deal by saying “this offer is good for today only.”
Pawn loans are usually much less than the items are worth…
They come with high interest rates or fees… and most must be repaid within 30-to-90 days.
The kicker?
If you don’t pay it off on time… they may offer to let you extend the loan for additional fees… or they will resell your prized possession and pocket the profit.
In a 2019 survey… 73 percent of pawn borrowers reported still owing money six months later.

Now… for higher-dollar loans… some people go to car title lenders.
They function a lot like pawn shops… offering low-ball loans with high-interest rates in exchange for your car’s title.
They typically don’t do an income verification or credit check because they don’t care if you can’t pay it back.
Your car is the collateral.
If you default… you take another loan to cover it… or you’re losing your car.
Many times, car title lenders will partner with or run their own dealerships… making money off of whatever payments you already made… and profiting directly from the sale of your car.

If you’re in a situation where you are debating on getting a payday, pawn shop or car title loan… consider getting a personal loan through your credit union.
You would not only get a longer payoff timeline… but better terms and rates.
You can even use your car’s title as collateral for the loan and get a better rate… but unlike car title lenders… credit unions do run a credit check and verify your income to make sure you’re getting a deal you can afford.

If you don’t have great credit, you may be thinking there are no other options.
Not true.
Credit unions will work with people by offering alternatives to these predatory services.
Ascentra Credit Union has a service called “Cash-Now”, which allows members to borrow up to two thousand dollars without a credit check and get approval within minutes on the Ascentra app.
While we don’t run credit to approve the loan… we do report to the credit bureaus so you can build your credit as you pay it back.
Borrowers must be members of Ascentra for at least 90 days, with at least 60 days of deposit history, and loan terms vary by amount borrowed.

While payday and title loans are often the first things people think about when they hear “predatory lenders”… rent-to-own stores may fly under the radar… but can also be very costly.
Typically, they’re lending out furniture or appliances that you pay for weekly or monthly… and after you’ve finished the contract, you own the items.
They make it sound affordable…
“Just 30 dollars a week for this couch and eventually it’s yours!”
But here’s the catch… that 600-dollar couch could cost you two thousand dollars by the time you’re done.
Even their “buy now” or “same as cash” price is often double what you’d pay at a regular store.
Also keep in mind that not everyone finishes their contracts, so many items get returned to the store and rented out to someone else.
You may be paying top-dollar on an already used item that they may sell as “new to you!”.
Some rent-to-own stores brag that they don’t charge interest… but instead have incredibly high mark-ups which range from 43-to-468 percent APR.
It would be much cheaper to go to a regular store and pay cash or even put the charge on a credit card.
Ascentra’s highest credit card rate is 17.88 percent APR, which is well below the 400 percent you could be paying at rent-to-own stores.
Better credit scores get even lower rates.

Now… it’s not just suspect storefronts you should be avoiding.
Let’s talk bigger stakes, like rent-to-own homes or contract mortgages.
They sound simple…
You just pay an upfront fee or downpayment… then pay rent until you own the home.
But… it’s not that simple.
The contracts are typically written up by a lawyer who makes sure the deal benefits the seller… not you.
Sellers often target people who can’t qualify for a traditional mortgage… so buyers end up paying high interest rates and there’s usually a balloon payment at the end of the contract period.
That means the contract is structured so the monthly payments are less than what would actually pay off the loan… so when the contract ends… you still owe.
At that point… you have to pay the rest off as a lump sum.
If you can’t make that balloon payment or break any of the terms of the contract like paying rent late, having a pet, or smoking in the home, you could lose the house… and all of the money you put into it… including that downpayment.
Not only that… but many hopeful homeowners make updates to their property, like landscaping, home repairs, or renovations… and they lose out on those investments too.
If you’re looking to buy a home but don’t have enough saved up or need to work on your credit… you’re probably better off renting until you’re able to qualify for a traditional mortgage with a credit union.
At least while you rent… your landlord should take care of the home repairs and you have the ability to get your deposit back at the end of your lease.
Now, whether you have a goal to buy your home or just take control of your finances, Ascentra’s financial coaches can work with you on building credit, creating a budget you can stick to, and developing long-term strategies to get out and stay out of debt.
Once you’re ready for a traditional mortgage… you can get into a home with a fair interest rate, a longer payoff timeline and no surprise balloon payment.

Sometimes predatory services may look like a lifeboat when you feel like you’re financially drowning… but really, they’re just an anchor.
However, with a trusted financial institution, you don’t just stay afloat… you find solid ground…
So, avoid the traps, stay in control of your finances and steer toward the financial future you deserve.

“Today Ascentra is Making Sense of Identity Theft”

Identity theft is a crime that uses your personal information to commit fraud -  at your expense.

The methods used by thieves to get your information are on the rise.

Skimmers are devices which are placed on ATMs, and secretly swipe your debit or credit card information.

Phishing, is when a scammer pretends to be your financial institution, or a company you do business with, and tricks you into divulging your information.  

Less sophisticated methods include stealing your mail, or doing a change of address request so billing statements go elsewhere.

Even your children may be at risk. Fraudsters may persuade minors to divulge information, through online video games. 

Avoid becoming the victim of ID theft by being proactive.  Never give out personal information to unsolicited calls or emails.

Review statements regularly, place mobile or email alerts on credit cards.

And be sure to lock computers, laptops, and all your mobile devices.