Page 44 - Book1E

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have enough for a movie so a friend offers to pay. A coworker buys your lunch when you’re a little short. Mom lends you money for new clothes for an important interview. Sometimes a loan from a family member or friend can be a lifesaver. It prevents you from dealing with creditors or paying high interest. But loans from people you love should be handled with the greatest care of all. Too many good relationships are ruined because a loan wasn’t repaid or expectations weren’t met.
If you put a purchase on someone else’s credit card, it is even more important to pay them back right away. If they are forced to carry a balance for you, your relationship will sour quickly.
What should you do?
If you have to turn to friends or family when an emergency arises, put a good faith agreement in writ- ing stating when you will pay them back, and then make sure you keep the agreement.
When charging a purchase to some- one else’s credit card, be sure to calculate the interest as well if you have to pay the amount back over a few months.
Payday Loans
The payday loan business has grown into a multibillion-dollar industry that you should avoid at all costs. It is an industry that takes advantage of thousands of struggling, hard-working people who have trouble making it to the end of the month but who are collecting pay stubs and maintaining a checking account. The rates are exorbitant. They might not seem so bad at first, until you consider the reality: If you borrow $300 for seven days for a fee of $20, you are paying an annual percentage rate of 360%. These companies get around the legalities of
Poor Cash Flow