No checking account required, low rejection rates, and fast cash are all characteristics of a debit card payday loan. If you’re in a pinch, these features can make prepaid payday loans look like the only solid option to float your income until the next paycheck. But, like with any other payday loan, lenders advertise convenient qualities designed to draw in desperate workers. Here are some of the dangers of debit card payday loans to beware of before you apply.
Hidden Fees
All of the features that draw borrowers to debit card payday loans are the exact ones that manipulate them into paying hidden fees. If you manage to find a debit card payday loan with little to no interest payable, you’re likely to be hit with insurmountable, unknown charges. Service charges, activation fees, and other balances can pile up if you aren’t careful with your borrowing.
Fast Payback Period
Debit card payday loans are a quick solution for fast cash, but they also require a fast repayment. Sometimes, lenders want the full amount to be returned within a month or even weeks. If you aren’t able to fork over the entire amount due in time, you can easily end up stuck with additional debt just to prevent loan defaults.
High Interest
Payday loans are never free. In fact, they often come at a cost so high that it forces borrowers into a cycle of outstanding loans. If you select a debit card loan with fees included, the interest rate can jump well over 100%. However, it’s also important to know that not every debit card payday loan comes with an interest charge, because those that don’t will often have other stipulations that can pile additional charges to your balance.
Increased Limits
If you manage to pay back your debit card payday loan on time, lenders will most likely offer to extend your balance. This may be an enticing offer to incentivize more borrowing, but lenders often use these tactics to lure responsible workers into seemingly inescapable payday loan traps.
Debit Card Payday Loan Consultants
Before you apply for or accept any payday loans, speak with the debt professionals at Progressive Debt Relief. Our team of consultants can assist you into the right loan situations to prevent a toxic borrowing cycle from starting. Or, if you’re already feeling the pressure of outstanding payday loans, we can help relieve your debt and find the best course to financial security. Call us today for a free consultation at 1-877-590-1847.
