It’s no fun trying to “make it ‘till payday.” The unfortuate but all-too-real fact of the matter is that most folks in this country live paycheck to paycheck. There isn’t any room in their budget for error, and there isn’t any leeway for things like unexpected expenses. One relatively minor even – like a $200 car repair or a missed ATM withdrawl from your checkbook register – and you can be facing a series of bounced checks and the fees that accompany them.
So, you start the Payday shuffle. You write a check from one account to another to cover checks that are going to bounce. At one time, that would have bought you two or three days. In many cases, that was enough to get to your next payday, deposit your paycheck, and cover the bad check.
Another move in the payday shuffle was to go to a store, usually a grocery store, that would allow you to cash a check. You could cash the check and then you’d have a few days until it cleared. This would let you buy groceries, or get some cash to tide you over.
Today, however, with elctronic funds transfers and the way banks are so rapidly connected, these tactics just don’t work. The payday shuffle is quickly becoming a thing of the past.
To be sure, it’s probably a good thing that times have changed. After all, knowingly writing a bad check is technically a felony. While you’re not likely to be prosecuted for doing it once, and while it’s hard to prove in court, it’s still wrong. It’s also potentially expensive, because if checks start to clear before payday you’re truly screwed as all of the fees eat up your paycheck.
Payday loans are one recent solution to this connundrum. You can take out a payday loan today and write a check for the amount you’re borrowing (plus a fee, of course). The payday lender holds the check until your paycheck clears. That way, you avoid writing bad checks intentionally, you save the cost of bounced check fees and you save the embarassment of a business calling you up to ask when you’re going to cover your bad check. There are even payday lenders online that you can borrow from.
To be sure, the interest rate is significant on payday loans. The good news is that the short term of the loans keeps the fees to a manageable amount. While it’s not an ideal solution, using a payday loan is usually a better option than trying to do the payday shuffle.