Help for a neighbour please...........

vwman_3

I'm asking this question on behalf of a neighbour so that hopefully he can see the error of his ways.
To cut a long story short, my neighbour works for himself, and has done for 3 or 4 years now.
He recently went through a messy divorce and has financial problems.
In order to make ends meet he has taken to frequenting a payday cheque advance firm where he cashes post-dated cheques to the value of £500 and then pays the cash back on the first of the month then he re-borrows the same amount every month, over and over.
To borrow £500 it costs him £60 so in effect he is only getting £440.
He is due to get a large cheque in November which will sort all his financial problems and put him back in the black.
He has a Capital One credit card 29,9% interest, what I thought was would it be better for him to borrow £500 from that card as an advance and pay that back at the end of each month would he save money that way, and then re-borrow on the card until November.
Thanks in advance for any advice VW

Emmzi

He is paying 12% interest a month .. in effect about 144% APR!! on payday cheque loans.

Anything with an interest rate of less than 144% is an improvement!

vwman_3

Thanks for the quick reply, 29.9%APR is bad enough but 144% is a nightmare........

grumbler

In fact 12% per month is 290% APR ...:D :eek:

vwman_3

grumbler wrote:

In fact 12% per month is 290% APR ...:D :eek:

Bloody hell it get's worse.......... anyway thanks.