Trick or Treat: Will these Financial Resources Help or Hurt You?

Photo by Julia Raasch on Unsplash

Consider how the following resources support or challenge you on your journey to financial independence.

Payday Loans

It’s spooky season and there’s nothing quite as scary and dangerous in the financial world as payday loans. They’re ghastly, ghoulish creatures that should be avoided at all cost. This is the biggest trick in the book designed to lure people facing hard times to make bad decisions.

Payday loans are a trap meant to keep you in a constant cycle of debt and dependency. They typically have outrageous interest rates that are near impossible to pay off that can be as high as 780%. Loans are not bad when used responsibly. Banks and credit unions typically offer good loans with reasonable interest rates to qualified customers. Payday loans are at best a bad option that can haunt you for the rest of your life.


Opening New Credit Cards for the Perks

Like a good haul after a night of trick-or-treating, this one is a mixed bag. Opening new credit cards and receiving valuable perks can be either an alluring trick or a beneficial treat. It just depends on how you use them. Credit card companies are constantly looking for new customers to utilize their services. Oftentimes, they will offer incentives to entice you to choose their product. Rewards like airline miles for travel, cash back deals, and zero to low introductory APR, grab the attention of the financially uninformed and savvy alike.

Every person’s particular situation is different and only you know what’s best for you. However, if you are in the early stages of your smart money mindset journey and have not yet developed the discipline for budgeting and responsible credit and money management use — run! These offers, which usually encourage you spend a large amount of money in a given amount of time, can trick you into getting into more debt and put you further behind than when you began.

If you have developed good money habits and feel confident handling new credit wisely, then opening a new card for the perks may be a good part of your overall financial strategy. Cash back reward deals and a larger debt-to-income ratio can both be used to help advance your other financial goals such as paying down debt, qualifying for a new house, or saving for a family vacation. That’s a big treat!

It is important to remember that when used responsibly, credit cards can be a tremendous asset. Strive to use no more than 30% of your available credit and pay off balances every month. Credit cards and their perks — a trick or a treat? The answer depends on you, and your actions.


Credit Repair Services

For many of us, financial literacy is a relatively new thing. Even if we were already familiar with its core concepts and know the basic rules of wise credit and money management, we may have fallen on hard times or made decisions and possibly compromised our standings with credit agencies. Knowing that we need to get back on the right track we hurriedly look for solutions. In an attempt to correct wrongs, many people turn to any number of popular credit repair services.

Credit repair companies can be tricky. Oftentimes, individuals who offer credit repair services don’t have the qualifications, certifications, or experience to help you properly navigate your credit report and provide actionable solutions towards financial health. For those that are qualified, they often charge extremely high fees and lack the accountability needed to help empower you on your journey to financial freedom. For that reason, we believe that credit repair services can either be a trick or a treat — but remember, a better solution is available.


HOPE’s Credit and Money Management Coaching

Believe it or not, despite HOPE’s presence in almost half of the United States and the 1.8 million individuals impacted by our programming, there is still some question about our financial empowerment model. Is it a trick or is it really a treat? While it may be hard to believe that an organization provides credit and money management services at no cost to the client, it’s actually true! It has always been the belief of our founder, chairman, and CEO, John Hope Bryant, that people should not have to use their hard earned money to pay for financial services that will put them in better financial shape. Clients should use that money towards their financial goals and instead pay with action, willpower, and determination. Our services are a treat for our clients and sweeter than anything you’ll find in your child’s Halloween goodie bag.

Our financial wellbeing coaches are trained and certified to empower individuals through workshops and one-on-one counseling to take control of their finances, by creating a budget, reducing and paying off debt, and clearing errors from their credit reports. Seventy-two percent of our clients see a FICO score increase; 25 percent achieve a 700+ FICO score after six months of participation. There are no tricks, no gimmicks, and no hidden fees — only impact and verifiable results.

Don’t get duped into making bad financial decisions. HOPE is here to help. If you or someone you know could benefit from our credit and money management program, we encourage you to visit one of our 100+ HOPE Inside locations across the country. You can find the location nearest you here: http://operationhope.org/map/

Act today to create a secure financial future — now that’s the best treat of all!