Payday loans are notorious for their average high annual interest rates. According to the Consumer’s Union:

“Payday” loans are small, short-term loans made by check cashers or similar businesses at extremely high interest rates. Typically, a borrower writes a personal check for $100-$300, plus a fee, payable to the lender. The lender agrees hold onto the check until the borrower’s next payday, usually one week to one month later, only then will the check be deposited. In return, the borrower gets cash immediately. The fees for payday loans are extremely high: up to $17.50 for every $100 borrowed(1) , up to a maximum of $300. The interest rates for such transactions are staggering: 911% for a one-week loan; 456% for a two-week loan, 212% for a one-month loan.

So, if you like John, have a kind-hearted boss, you may be surprised to discover that he or she will help you out in a pinch. Of course, don’t abuse this privilege. When you get paid, pay back the advance.

For more information, here is a fact-sheet on payday loans.

MiCash doesn’t offer payday loans, but the MiCash Prepaid MasterCard does offer the iAdvance Line of Credit from MetaBank. With iAdvance, provided you have direct deposit set up on your prepaid card, you can take out a small loan for one month (at a cost of $2.50 for ever $20 borrowed or 12.5%) and the amount you borrowed is automatically paid back out of your next deposit. This helps you avoid extending the loan and falling into the vicious cycle of taking out loans to pay back interest on earlier loans. The program is designed for people who want to borrow small amounts in order to build credit history with the one or more major credit reporting agencies.

Consider a Payday Advance Instead of a Payday Loan is a post from: MiCash Prepaid MasterCard

Flickr image by Teresia

A prepaid debit card allows you to pay for gas at the pump with plastic. However, you may not realize that many gas stations will preauthorize as much as $50 or even $75 on the card if you use a signature transaction instead of a PIN transaction. This is also known as a “block” on the card. The reason it happens is that the gas station doesn’t know if you have enough money on your card to cover your gasoline purchase. Find out more about blocks on the FTC website.

In an MSN Money article British Petroleum spokesperson Sarah Howell explains, “We want to make sure that we’re protected, that we get payment for the gasoline.”

A PIN transaction at the pump (or inside the gas station) is in real time, and avoids the block or hold on your card. However, because signature transactions are “offline” and not in real time you may experience a block for a few hours or even several days until the transactions are processed in a “batch” process at some point in the future.

In the case of a checking account debit card, if you have less than the block amount in your account, you may be hit with an overdraft charge, even though your actual charge is less than your balance. For example, suppose your pump transaction is $27 and you have a $50 balance in your checking account. The pump pre-authorization of $75 causes you to be temporarily overdrawn.

The MiCash prepaid MasterCard protects you from any overdraft fees because whenever you attempt a transaction that is more than the cash you have loaded onto your card, the transaction will be rejected at the point of sale. Not all prepaid cards are alike and some do allow overdrafts and charge overdraft fees.

The bottom line?

• Use your PIN number when paying at the pump, or
• Have at least $75 on your card to cover any pre-authorization “blocks” on signature point-of-sale transactions.

Paying for Gas with a Prepaid Debit Card is a post from: MiCash Prepaid MasterCard

Photo by samuraipaolo

Until the day when resources are no longer scarce and everyone can get what they want, debt is bound to be a part of life. It’s quite likely that everyone has experienced being financially short-handed at one time or another. It could be a rent loan from a brother or sister, or maybe a considerable sum needed to pay off hospital bills. These debts could be the ones paid off to go to college, or the kind taken on in order to start a new business.

Debt is never a pretty experience in any shape or form. It is nerve-wracking and can be very painful, yet it can be managed properly. After all, if people did not borrow or lend, much of the financial market in the United States would stop cold. In that regard, debt is a natural part of life. It is also a part of life that we can, if not totally avoid, still learn to control to the best of our abilities. It is all a matter of thinking smart and spending well.

So how do you start fighting debt? Here are some important points to help you stay sane.

#1: If you haven’t been strict on your budget, do it now.

And we mean it! We mean breaking bad habits, like choosing to eat out because you’re too tired to cook, or falling asleep while reading a book with all the lights on. In these cases, cutting back on financial ‘frivolity’ and unnecessary use of electricity are things you should be actively doing.

Budgeting doesn’t always mean hand-to-mouth living, but it does mean cutting the excess. It means setting aside money every month to service the debt, whatever it may be.

#2: Sell things!

Remember: not everything you own, you needed then. Nor do you need it now. This includes things you bought with your own money. This also includes all those embarrassing things your Aunt Corinne gave you for your birthday that you know you’d be ashamed to be with. You don’t want them around anymore. So, turn them into money and sell!

Think of it this way: Your house or apartment is full of things that take away from the efficiency of your house’s utilities. It is harder to heat, light up and keep clean a home full of clothes, gadgets, books and the like. Removing them doesn’t just provide short-term money. It can also be a way to cut back on what you do need to spend for.

And remember: your trash is someone’s treasure. Visit the debt blog ManVsDebt.com to read a story in which one woman sold stuff to pay off $15,000 in nine months. Who knows – you might do even better.

#3: Not making enough? Diversify.

This blog alone is full of ideas about how to make money on the side. Harness your creative talents! There are dozens of new ideas you can try in order to turn a profit.

If you have a steady income stream, keep it going. In fact, Barbara Kiviat wrote in Time magazine that jobs are the new assets. So, we either work hard to increase our salary (which takes time), or we can look for and take on extra work. Not easy, but we have to do what’s necessary.

So does that help? Come back for more ideas here! Or even better, share yours! We’d love to hear from you.

Debt Destruction Derby: Fighting that Ugly Four-Letter Word is a post from: MiCash Prepaid MasterCard

Here at MiCash, we keep giving you tips on the best ways to save your funds, fix your budget, protect yourself from having your money stolen, and basically milk everything you have earned for what it is worth. We hope we are not giving you the impression that we are promoting a miserly lifestyle. While it is true that saving up is very important and learning to spend less than what you earn everyday is a good rule of thumb to live by, we are not totally shunning the idea of indulging oneself every once in a while. Whether it’s to reward yourself for doing a job well done or as a way to relieve yourself of stress, splurging can be a good thing. We just have to make sure that actually have the money to splurge.

The Difference between Splurging and Overspending

To splurge is to indulge oneself with some luxury or pleasure, usually a costly one, because you can. If you do not have the cash to spare, you would be overspending, not indulging on your spending power. Overspending is like eating an undercooked meal. You eat it because you are too hungry to wait, and the next day, you get an upset stomach. Many times, we have experienced this: Going on a shopping spree and ending up wishing we did not buy half of the things we just bought, because having a lighter wallet feels too unsettling.

Save Up for your Splurge

Wouldn’t it feel so much more fulfilling when you know you will be able to spend without having any worries? Give yourself something to look forward too. Have a more tangible reason to save up your money than simply to get ready for a rainy day. It is best to put a rough number on how much you want to set aside for your splurge. This way, you can stop yourself from going overboard on your expenses.

Attend to Business before Pleasure

Do not start splurging when you know you still have unfinished financial business to deal with. If you have any bills to pay or debts to cover, attend to them first. The last thing you want is to fall further into debt because you ended up using the money that was supposed to pay for your rent to purchase a coveted pair of boots or a shiny new video game console instead.

Don’t Splurge with your Credit Card

It is easy to overspend with your credit card because you can’t exactly monitor how much you’ve already spent using it. You will just have to surprise yourself when the credit card bill comes in. The problem with this is: What if you find that you don’t have enough money pay for the accumulated credit on that bill? The amount will accumulate interest, and you would be at risk of getting stuck with credit card debt.

To prevent this from happening, keep your credit card tucked in your wallet or card holder during your splurge. Use cash where you can. For large expenses, opt for a prepaid debit card instead for cashless payment.

The Do's and Don'ts of Splurging is a post from: MiCash Prepaid MasterCard

With the holidays over, we have now fallen back to the daily grind. Some of us, due to an excess in year-end indulgences or generosity, have greeted the New Year with lighter pockets and slightly shrunken savings accounts. And you know what they say, “There is no time like the present.” If you want to replenish your savings and acquire more money to spend for this year and further beyond, better start now than risk the fate of having continually dwindling funds throughout the year.

Spend Less than You Earn

This may seem like a simple rule of thumb, but it is easier said than done. Many of us actually have no idea just how much we spend in a day, much less how much we spend in a month. Some of us may have a general idea because of the bills we pay every month, but many forget to factor in daily expenses (e.g. groceries, commuting fares or gas expenses, pet care and maintenance, regular medication costs). Do this, and do not be surprised if you find that your daily and monthly expenses are much higher than what you have expected them to be.

Try to make a regular record of your daily expenses and then plan a budget. Wean yourself off what you would consider unnecessary wants, and prioritize your needs. Living beneath your means is in no way miserly, nor will it make your life miserable. You don’t seriously have to buy a Starbucks venti latte every morning, do you? The bulk of our earnings should be saved rather than burned. This way, not only will our funds get back to their previous state before last year’s holidays, but we will also have enough for that unexpected rainy day.

Choose Cash over Credit

Just because you have one or two credit cards does not mean you should use credit for even the smallest purchases. You can afford to pay in cash after filling up your car with gas, for example, or when you only need to buy a few items at the department store. Using your card too much can lead to credit card debt. There is no such risk with good old-fashioned cash payments. When you do use your credit card, try to charge as little as possible. And when the due date is given, make sure that you will be able to pay your credit card bill on time. See point number one to learn one way to ensure that you will always have money to allot for credit card bills payments.

If you feel more financially secure when you are not carrying a lot of loose cash then a good way to avoid the threat of credit debt is to opt for a prepaid debit card. The main difference between credit cards and debit cards is that the latter only allows the cardholder to spend within the account’s remaining balance. Whatever amount you put into your debit card is how much you can spend using it. It is almost like paying cash, but with the convenience of plastic, cashless payment. Debit card transactions are never charged interest, and there are no monthly bills.

This Year, Say No to Overspending is a post from: MiCash Prepaid MasterCard

Is it time to switch to a pre-paid Visa or MasterCard? Let’s face it: It is a known fact that managing a regular credit card is tough for many people. Many of us are guilty of maxing out our cards and putting off paying more than the minimum monthly dues for prolonged periods of time. For people who are not very savvy at managing their debts, keeping a credit card is just too much.

Fortunately Visa and MasterCard have created a means to help people simplify their cashless purchases with pre-paid Visa and MasterCard. These cards are used in a very similar way to regular credit cards. The difference is that pre-paid Visas and MasterCards are front-loaded, meaning your account must first have sufficient funds for you to be able to use them. For as long as your account has enough money loaded, you can use the card any way you want and in any place where Visa and MasterCard are accepted. With this type of card you can go shopping, dine at an accredited restaurant, book a flight or hotel room or purchase items online.

A whole lot of financial convenience

Using a pre-paid Visa or MasterCard offers a lot more benefits than using a regular credit card. Pre-paid cards offer convenience and safety. Just like a regular card, you can use pre-paid cards for cashless transactions. Above all, using a pre-paid card is a lot safer than carrying around cash when shopping. Pre-paid cards are covered by the liability policies of Visa and MasterCard so that if you lose your card, the pre-paid card provider can re-issue a new card for you with your balance still in place.

For people who are wary of using regular credit cards, making the switch to pre-paid cards is the way to go. Pre-paid cards do not have interest, and since they are front-loaded, meaning you have to deposit sufficient amount of funds prior to using it, you won’t have to worry about overspending, as opposed to using a regular credit card.

A plastic that offers you a peace of mind

For people who have gotten burned by piles of debt, using a pre-paid card is the ideal alternative to the convenience that a regular credit card offers. With a pre-paid card, you get a liberating peace of mind from realizing that you are not using money that you don’t have. With pre-paid cards, you can say goodbye to monthly bills, finance charges and late charges. With a pre-paid Visa or MasterCard, you get a sense of pride from purchasing using your own money.

Other benefits

Using a pre-paid Visa or MasterCard gives you access to shop at millions of locations worldwide where Visa or MasterCard is accepted. Just pick your item, flaunt your card and swipe it. With a pre-paid card, you also get access to millions of ATMs worldwide when you need cash and you can also conveniently pay your bills by phone or through the Internet.

To reload your pre-paid card, you can simply deposit an amount directly to your card through your bank or through any participating reloading centers in thousands of locations. In the U.S. alone, there are currently over 95,000 locations that allow you to reload money to your pre-paid card.

To learn more about pre-paid MasterCards, visit MiCash.net.

The Convenience and Flexibility of Front-Load Visa and MasterCard is a post from: MiCash Prepaid MasterCard

Credit and debit cards are handy pieces of plastic. Sure, they offer a great way of scraping off the ice on your car window. But more than that, above all, they offer the convenience of cashless shopping. Since the invention of credit cards a few decades back, many people have been lured to the promise of purchasing without the need to carry cash. Credit cards offer convenience and safety. However, along with the convenience brought about by credit cards are the many financial burdens that credit card mismanagement brings.

Maintaining a good credit score

Having a credit card is about more than just the convenience it offers. People own credit cards for a variety of reasons. Many people who are getting ready for a mortgage build good credit scores around their credit cards. People who are looking to take out a bank loan can also apply for credit cards to build credit history. For these types of people, the question is not just how they use their cards – most importantly, it’s about how they take care of it by paying their dues on time.

Indeed, getting a credit card is great way to build your credit history and rating. Your credit card rating will show your creditors your levels of credibility and accountability, giving them some good information with which to base their decision on in granting you a loan.

Paying only the minimum – why it’s not a good idea

Unfortunately, many credit card owners get the wrong idea when it comes to paying only the minimum charges on their cards. Ideally, minimum monthly payments offer credit card holders some convenience by giving them an option to pay only a predefined percentage of the monthly bill. However, paying only the minimum amount is a risky deal as it will make you pay off your dues longer. Also, because of minimum monthly payments, you will end up paying for compounded interest which could total your debt to an amount that you will have to pay endlessly.

Also, the problem with minimum payment is that banks may decide to raise the monthly minimum payment dues. If your cash flow only allows you to pay the current 2% monthly minimum payment, you may still get by easily. But if banks decide to double the minimum payment, you could end up in a very awful financial situation.

How not to end up in a messy credit card debt

A good rule of thumb when getting a credit card is to always remember that credit cards are not free money. The whole idea of getting a credit card is that if you are earning around $2,500 a month, and you have a $2,000 credit limit on your card, you can spend the entire limit as you wish and pay off $1,000 from your monthly earnings. That will still leave you with $500 cash.

Financial experts would advise that, to avoid the financial trap called debt, it is wise to pay off more than what you’re legally required to for the amount you’ve taken out of your credit card. Don’t just pay the monthly minimum payment, so you won’t end up paying longer for your credit card debt than you should.

Another good rule of thumb – don’t swipe that card unless you REALLY need to.

How to Become a Savvy Credit Card User is a post from: MiCash Prepaid MasterCard

Any financial expert would agree that getting home insurance will be among the wisest financial decisions you will ever make. You will be surprised to discover that property insurance such as home coverage doesn’t cost too much. For only a few hundred dollars per year, you can buy yourself tens or even hundreds of dollars in worth of peace of mind.
What are the main benefits of a home insurance policy?

The three basic home insurance types include home protection, personal property protection and liability coverage. Insurance applied to your home protects the entire structure of your home, including a shed or detached garage and even the properties inside your home. Any little damage to your home could cost you a fortune or at least a substantial financial setback. An adequate insurance policy could provide you ample financial help for repairs.

Some of the scenarios that you can protect your home against include damage caused by a vehicular crash, explosion of your water heater, damage caused by a fallen tree and partial or total damage caused by fire resulting from a lightning strike. Other causes that were not deliberately caused can also be considered.
With enough home insurance coverage, policy holders won’t have to worry about shelling out some amount to cover the repairs. The insurance coverage will take care of repairing your home back to its pristine condition.

Another attractive benefit of home insurance is the coverage on your personal properties. These include the contents of your home, such as furniture, a home theater system, computers, and even jewelry and other items as stipulated in your insurance contract. So if an earthquake hits your area and causes your bedroom ceiling to smash into your 32-inch HDTV, if your home is adequately covered, you will receive a check to cover the costs of ceiling repair and TV replacement.

Liability coverage is also provided to most home insurance policy holders. This type of coverage can protect you financially from any damage you cause inside or outside your home. This protection can be triggered by negligence or accidents, and includes coverage such as medical expenses to other person and your legal expenses for any lawsuits filed against you. To illustrate to further explain how this type of coverage works, let’s say that one of your guests accidentally cut himself with a knife that you left on your dinner table. Your liability coverage will shoulder your guest’s medical expenses for any treatments his injury might require.

If you need more information on how you can take advantage of home insurance, visit or call your property insurance broker. They should be able to accommodate your inquiries concerning home insurance, and they should be able to point you to the type of coverage that is most suitable for you.

Property Insurance 101 is a post from: MiCash Prepaid MasterCard

Spending more than you earn.

This is perhaps the most common mistake of all. If you want to be wealthy, you have to a spend less than you earn. If you know you can’t afford something or if you will have a hard time paying it off, then don’t buy it. If you live above your means, you’ll always be in debt and you’ll always be stressed about the fact that you’re in debt.

Not saving enough money for retirement.

Let’s face it. We all want to live our golden years in comfort. It is imperative that you plan ahead on how much you need to save today for your retirement. Think of all of the things you love to do now and ask yourself if you will be able to afford them when you are no longer working. If you love to travel, make sure you put in a lot of extra cash to continue to enjoy your travels and to experience the other luxuries of life.

Not teaching your children how to earn and save money today.

Most parents make the mistake of handing everything to their children for immediate gratification. What you can do is to give your child an allowance and let him or her learn the value of money. Allow them to learn that it takes time to build up the amount of money needed to purchase what they want. Let your child buy an item after they saved a few dollars. This will teach him or her to make better money decisions in the future.

Not paying in cash when you can.

If you have a credit card, try to charge as little as possible. But if you do have to charge items on your credit card, make sure that you are able to pay the bill on time. If it is something you do not need immediately, you can probably wait until you have enough cash to pay for the item. Or at the very least you will be able to pay off your credit card bill when the money is due.

Getting into credit card debt.

If you want to avoid trouble in your personal finances, do not open several credit cards and start charging every time you purchase. A similar mistake is to put all of your debt onto one low introductory rate credit card and keep charging and pushing up the bill. The best thing you can do is to put all of your debt into one area and continue to pay it off without charging and piling up more debt, reducing the stress in your life.

Investing in bonds.

If you think your money is safe in bonds, think again. In case you didn’t know, the extra money percentage rate is so low that you will be better off putting your money into the stock market. Many people, especially retirees, make the mistake of putting a large percentage of their money in bonds. They may end up losing money in the last fifteen years invested.

Failing to invest wisely.

The stock market goes up and down. Every time it does this over a short period of time, it is called market volatility. The only way to keep yourself insulated is to invest in a wide range of companies in various market sectors that you can expect to move somewhat out of step with each other.

Money Mistakes You Should Avoid is a post from: MiCash Prepaid MasterCard

The world today, however, has dramatically transformed since the dark ages, when we paid off what we owed using our livestock, our gold, and our daughters (yes, dark days indeed!). We did not, however, stop owing people anything to this day. We pay taxes. We pay off insurance premiums. We hand money for loans we take for our business, our car, our home, or our children’s education. We make money too. We just spend it on big, important matters of consequence.

As such, we’ve come up with some online resources to help you stamp out debt. We’d like to share with you some of the nifty places we get wisdom on keeping our money safe, secure, and completely ours. After all, if the United States economy was on the brink of collapse because too many people couldn’t pay off their debts (which turned out to be bad debts in the first place), then we call this a bit of community service a civic duty.

First up is the debt service blog, aptly named DebtServiceBlog.com! The blog is precisely that: A repository of all manner of debt management tips and strategies. They feature techniques to prevent a massive financial meltdown that are simple but effective and foolproof. They also have solutions for negotiating with debt collectors, and finding ways to buy oneself time to be able to service the debt, if not to reduce or even eliminate obligations altogether (although that on its own would be highly unlikely).

Another interesting read is BankRate.com, a website that aggregates banking information. While the data on possible interest rates and inflation rises can all be interesting, what works here is their section on ‘advice.’ Their team of writers has some sharp points to make on saving money, and on servicing debts. Most recently, they outlined some “dumb financial moves” that illustrate frustrating “recession regrets” done during the economic downturn. (They are “not having emergency reserves,” “investing in the so-called ’sure thing,” “panicking over the market collapse” and “ignoring the fine print”.)

BankRate.com can clue you in on some of the trickier points of navigating expenses. They also have on-site some nifty tools to help calculate one’s mortgage, credit card and retirement 401(k), among others.

Last but not the least is ManVsDebt.com. Just as the name suggests, Man vs. Debt chronicles the story of Adam Baker, a relatively ordinary guy. He’s not a finance expert, nor does he have extensive economic spreadsheets and flowcharts on how to get out of debt. That’s exactly why this blog works – it’s meant to show how people can get their finances straight so their lives can free up. Not a ‘get out of debt’ guide, but a ‘get into life’ one.

The blog is well-written and entertaining. It is also full of intelligent ideas on identity protection, ideas on dealing with taxes and how to turn negatives and losses into positives and net gains. These are interspersed with Baker’s own story, chronicling how his life changed since he switched mindsets from ‘working’ to ‘living.’ The blog will never sound like an authority on the matter, but then again, it never claimed to be that. It does, however, illustrate how simple steps can go a long way in making one’s fiscal future fit, in more fundamental ways that many can understand.

So there you have it. Do you have any favorite places you like to browse through on personal finance? Speak up and share!

3 Online Sites to Combat The Tiny Death Called Debt is a post from: MiCash Prepaid MasterCard