Would a bank payday loan be any safer?

A “safer” payday loan sounds like an oxymoron. Critics have branded these notoriously high-cost loans as debt traps that cause borrowers to go ever deeper in the hole.

Thanks to a recent regulatory change, it now may be possible for banks to offer small, short-term loans that could be a lot less dangerous for borrowers. Whether banks will actually do so remains to be seen.

The right moves could save low- and moderate-income Americans billions of dollars a year. The wrong moves could create yet another sinkhole for those who are already struggling. In my latest for the Associated Press, how to avoid falling into the payday loan trap.

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Comments

  1. robert dudley says

    I have 4 credit cards I no longer use. I have them in my sock drawer. They are almost paid off and have a low balance. Can I take a scissors to them as a form of deactivation or will that effect my credit score? I use 2 credit cards with high rewards and pay off monthly.

    • Liz Weston says

      Slicing them up won’t close the accounts and won’t affect your scores. You’ll still need to monitor the accounts for charges and potential fraud.