Payday loans.... urgh

ChopperST

Provided your current account is run appropriately and you have a reasonable period banking with them your own bank would have in all probability given you a loan or credit card.

bikermom

I actually didnt know that Jimmythewig - i thought that you got charged the full apr on the balance each month? With the payday loans the fees were rediculously small - we had codes so we didnt have to pay the arrangement fees, and the amounts we borrowed were so small over such a short period of time that we were paying around 3-4 quid for it.

John1993_2

bikermom wrote: »

I do not agree with credit cards, as in my opinion that is spending money that is not yours, same with finance - if i want something ill save and pay outright.

we had been turned down for a loan we asked for 2 years ago to do home improvement when i was pregnant because of our lack of credit, and were advised to improve our credit rating

Something doesn't add up here. You don't agree wiith credit, yet applied for some. You don't want any credit, but are seeking to improve your credit rating?

You thought that credit card APRs were "rediculous" (sic), at a few tens of percent, so instead took out loans at 3-5,000%?

I'm assuming that you aren't on a wind-up here, but for a serious poster you do seem to have quite a large number of inconsistencies. How do you squarre the above quotes?

dotdash79

ChopperST wrote: »

You took 3 pay day loans for no reason??!!

Sorry something you are not telling us here...

I'm seeing more and more people coming on here to say they have done what the OP has done and that they can't get a mortgage. This site needs to get the word out that not all credit is good credit for a mortgage.

bikermom

I'm assuming that you aren't on a wind-up here, but for a serious poster you do seem to have quite a large number of inconsistencies. How do you squarre the above quotes?

I apologise i am making things a bit unclear here. I dont like taking credit - my parents drummed it into me that credit cards are bad and i shouldnt get one to the point that even now im grown up i dont get them - plus I have a tendancy to get a bit lets spend money so i dont have them also to avoid temptation.

We had savings when we applied for the loan - but we wanted to keep them intact as i was due to take a long time off work due to having a baby. We also wanted the loan over a short period of time (4-6 months) as we wanted to pay the loan off before i left work - The bank felt it was unreasonable for us to be paying it off in large chunks and would leave us short financially. As it was we just took the money from savings and paid it back at the same rate.

bikermom

Oh and we wanted to improve our credit so we could get a new mortgage so we can move.

Im not good with finances - i try my best but really do not have much of a clue - and there seems to be a lot of conflicting information out there,

John1993_2

bikermom wrote: »

Oh and we wanted to improve our credit so we could get a new mortgage so we can move.

Well, I can understand the intentions but unfortunately you've not done yourself any favours.

As others have said, if you get a credit card and use it for normal living expenses (shopping, petrol etc), then pay it off in full every month then that should give you some better credit history, and it won't cost you a penny in charges or interest.

JimmyTheWig

bikermom wrote: »

I actually didnt know that Jimmythewig - i thought that you got charged the full apr on the balance each month?

As I say, for the vast majority of cards you don't get charged interest if you pay them in full each month.

With the payday loans the fees were rediculously small - we had codes so we didnt have to pay the arrangement fees, and the amounts we borrowed were so small over such a short period of time that we were paying around 3-4 quid for it.

That's still a lot of money to borrow a small amount of money over a short time. Which is why the APR is so high.

Even if you had paid interest on the credit card spending ... lets say you were charged 34.9% APR on £100 for a month. You'd have been charged around £2.50.

bikermom

Even if you had paid interest on the credit card spending ... lets say you were charged 34.9% APR on £100 for a month. You'd have been charged around £2.50.

and that shows how dumb i am... i thought if you had £100 with a 34.9% apr you would pay back 139.40 .

Am a little bit embarrased now of how dumb i am!

JimmyTheWig

bikermom wrote: »

I dont like taking credit - my parents drummed it into me that credit cards are bad and i shouldnt get one to the point that even now im grown up i dont get them - plus I have a tendancy to get a bit lets spend money so i dont have them also to avoid temptation.

In many, many ways your parents are right. In many, many ways you have been right to follow their advice.
For all the bad press that payday loans get right now, we actually see many more people on these boards who have got themselves in trouble with spending on credit cards than have done so with payday loans. But I think one reason for that is that they are more common.

I suspect that your parents told you more often about being careful when near a road than they told you not to play tag with a tiger. Even though the tiger would be more dangerous, more people get hurt on roads because more people are near them.
But the lack of warnings doesn't imply that tigers are safe.


Credit cards _can_ be very, very damaging. But when used right they are fine and can be quite useful. [I'm not suggesting that you get one for any of these reasons, but for background reading why not have a look at stoozing, cashback (or reward) credit cards and section 75 protection.]
If you don't think you can control your spending then you are doing the right thing in not getting one.

Payday loans _can_ be very, very damaging. The difference is that there is no real "right" way of using them and are never, really, useful.