VIDEO: Staying Out Of The Hole Of Debt

COLUMBUS, Miss.(WCBI)—Debt can make you feel desperate for relief and for some people, check cashing businesses are their way out. It can be a slippery slope. Earlier this year in a Supreme Court settlement, the licenses of 42 American Check Cashing Loan Stores were revoked.

“If you don’t put a plan in place that hole is just going to get deeper and deeper and deeper and much much harder to get out of debt,”said financial adviser Scott Ferguson.

Managing money is never fun but Ferguson says it’s the first step in trying to avoid accumulating debt.

“You have to know what you’ve got coming in verses what you’ve got going out. If you’ve got more going out then you’ve got coming in, you must find a way to quickly cut expenses or you’re going to build up and pile up that debt, which you don’t want to do,”said Ferguson.

Ferguson says one thing to definitely steer clear of when trying to avoid debt is check cashing, title, or quick loans.

“The interest rates can be crazy. It can be 780% interest on a 30 day loan, which is crazy and so you want to keep those at bay if at all possible. Look for other options. If you find you’re self in some kind of situation where you have to do a quick loan, look to a family member look for something because you’re paying all that interest back to somebody else, “said Ferguson.

Research shows that quick payday loan interest rates can start as high as 300%. For loans  needed shorter than a week it can be higher.

Columbus resident, Damarko Young says sometimes there is no other choice.

“Times get rough sometimes and if you’re credit ain’t where it needs to be starting way back in the days when you should have got you’re credit right.  You have to go to other little places that will help you out, I had to use them a couple times in my times of need and they were there for me,”said Young.

“It’s just like if you get a loan or something. You’re going to pay the interest on your loan but those interest rates on the payday loan is horrible they are higher than the loans. My thing is if I got it I got it if not then I don’t worry about it. I’ll just tough it out, “said Columbus resident Jackie Thompson.

Ferguson says overall to avoid loan store assistance, plan ahead.

“Start paying yourself first. Set some money aside with each pay day, to build up that cash reserve. I like to call it a rainy day fund. Those things are going to happen. Tires will go out, the washing machine is going to quite those things that we aren’t planning to have to pay for they’re going to have to be replaced at some point. You want to have a cushion, that rainy day fund over there. When those unpleasant expenses pop up, you’ve got something to lean on,”said Ferguson.

All American will refund more than $100,000.00 to 703 customers. Any transaction after May 11, 2017 is invalid.