Simple. By steering clear of them altogether.
Payday loans often require interest payments in the triple digits, and lawmakers in some states are actually trying to get rid of them altogether. Their reasoning? In many cases, there are no legal limits on how many personal payday loans a person can take out, leading to an aggressive debt cycle and increased predatory lending.
Additionally, payday scams often lure people into making authorized debit or credit card reductions, which gives instant account access to scammers.
If you think your only option for instant cash flow is a payday loan, we encourage you to think again--even if that means delaying a car purchase for when you're in a better financial position to purchase or lease. In fact, recent studies have shown that people who take out payday loans to avoid borrowing from friends or family, often end up doing just that in order to pay back the payday loan.
Consider consolidating your debt by working with a financial representative at your bank or credit union, taking on some side or odd jobs to boost your income, or biting the bullet and reaching out to those in your close social or family ciricles to help you during a bind. And remember that just because payday loans are an option, it doesn't mean they're a good or smart one.