Predatory lenders have been working to find new ways to rob you of your heard earned cash. They develop financial products with large upfront fees that will keep you coming back to them for years. These types of financial products are called money robbers. You think that these products are helping you but many of them are robbing you of your money.
Prepaid Debit Cards
Prepaid debit cards are the fastest growing products in the banking industry. These cards are typically pitched to individuals with poor credit and that are in Chex Systems. These people are unable to qualify for a checking account so they cannot get access to debit cards. While there are some decent prepaid cards that only charge customers one dollar or two, many prepaid cards have $9.95 and $19.95 activation fees. Some of the most absurd cards have $100 application fees just to apply for the card. There is not even a refund if you do not qualify.
Check Cashers often charge 2 to 3% for the “privilege of cashing your pay check. These fees can quickly rob you of your money. Imagine if you cash a $1,000 check every two weeks, you could easily lose $40 a month just for getting your check cashed. Commercial banks have now instituted check cashing fees for non banking customers. Banks will charge $5 to $ 7 to cash a check. How would you feel about having $7 taken out of a $100 check?
Pawnshops have been ripping people off for years. You either sell your item to the pawnshop for well below what it is worth or you trade in your items and then make payments on it for years. This is one of the biggest scams going. Pawnshops prey upon desperate people in need of some cash. The good thing about pawnshops is that eventually you may even get your item back for a whole lot more money than you paid for it.
Every time that you pay a late fee you are handing over free money to a creditor. Companies even report late fee income as unearned revenue because they have done nothing to earn it. Consistently paying late fees on cable bills, phone bills, and utility bills adds up over time. Think what you could do with an extra $15 to $20 every month. That could pay for your ticket to Toy Story 3 or a meal at Chili’s.