In case you’re ever wondering, you can cash a payroll check at most grocery stores. Back in 1992, when I first arrived in Colorado, I got a job within a few days working as a waitress in a Mexican restaurant near where I was staying. It’s odd too because I had applied for at least 200 jobs in the year before I left California and had not received even a phone call asking for an interview. In those days, there was no internet or CareerBuilder. I simply got a copy of the newspaper and applied for whatever jobs were posted there. This was a manual process, and I had to go to the local library to use one of their IBM Selectrics to type up my cover letters and use their copy machines to make copies of my resume. I didn’t own a typewriter or a copier. I sent out between 8 and 12 resumes every week I would imagine, and never got even one call. Then, I moved to Colorado and got hired to wait tables in the first 3 days I was here.
I took this job waiting tables where I got a paycheck every other week. I got checks of around $54 every 2 weeks, and I brought home around $15 a shift in tips. Out of this I had to tip the bartender and the bussers. The Colorado minimum wage in 1992 was $4.25 per hour. As a tipped employee, I got paid half of that, or just slightly over $2 an hour. I started out working 3 nights a week and got more hours as they were available. When I got paid, I walked over to Safeway to cash my check. They charged something like 2% to cash checks in those days, so I would get about a dollar less than my check was for, but this still seemed like a good deal to me, since I was “unbankable” at that time. I could then go through the store and purchase my groceries for the week: 5 boxes of macaroni and cheese for $1, a loaf of bread for .50, a pack of hotdogs for .89, and so on. This was food for me and my kids. I got very good at looking for food deals in those days. We might have been able to eat healthier, but we couldn’t eat any cheaper. Also, I got a free meal after my shift when I worked at the restaurant, so I ate a lot of burritos and enchiladas. I was grateful for it.
One thing I don’t remember ever seeing in Littleton, Colorado in those days, was a Payday loan company. I’m guessing they had them, but not within walking distance of where I was living. They may have had them on South Broadway in Englewood or East Colfax in Denver, but not where I lived. It’s a good thing too, because I have no idea if I might have been sucked in by one of these loan sharks, but thankfully, it wasn’t even a question because I didn’t have access to one and as I mentioned, I also didn’t have a bank account. I’ve known people since then, who have gotten themselves caught up in this mess and it really is a mess.
Yes, I consider them legal loan sharking. The interest rates on these loans are amazingly high and they build interest upon interest creating a never-ending treadmill of fear and debt in the borrower. Most people think of these as short-term loans, but they can rapidly become long-term and create dire situations. You don’t have to have good credit to borrow money from one of these lenders. In fact, you don’t have to have any credit at all. You just need to be able to fog a mirror and have a bank account they can set up for autopay. If they hit your bank account for the money and it’s not there, your interest rate goes up again, and you get hit for bank charges and fees by both your bank and the predatory lender.
The state of Colorado has a law that says you can’t borrow more than $500 from one of these loan sharks, but that doesn’t prevent you from going to another one and borrowing an additional $500 to pay back the first loan with the second one and so on. Now you’re on the treadmill.
The interest rate is a fairly reasonable 20% for loans under $300, but it goes up incrementally the more you borrow. It can go up 7.5% or more for each $100 over $300 that you borrow. The APR for loans like this is capped at 36% in Colorado, but the real cost including fees and extra charges can reach over 200%! There are other options for borrowing money on a short-term basis that are less expensive, but there are also other ways to make it to your next paycheck without borrowing any money at all. If you find yourself in a position like this, don’t allow your fear to run you. Stay calm and take care of yourself and your family first. Most places you owe money to will wait until you get paid. If they’re strong-arming you, they’re probably a Payday lender. No matter how nasty they get, you should be able to work with them on some level to get your loan paid back in a reasonable time frame. Whatever you do, don’t borrow more money to pay back money you’ve already borrowed. This is an example of insanity! In the meantime, they’re probably still hitting your bank account to collect their money, racking up more bank fees in the process. This is the situation that calls for that old piece of wisdom: “When you find yourself in a hole, stop digging!”
Just to be clear: What I was doing by cashing my check at Safeway and paying a 2% fee, was cashing my paycheck, it was NOT taking out a Pay Day Loan, which would have put me in an even deeper hole than I was already in. Sometimes we’re fortunate in our misfortune. That was the case for me, for sure.
Another thing I learned during this phase of life, is that there is plenty of everything everywhere in this country. We’re surrounded by abundance even when we’re in the most desperate of situations personally. The last thing anyone needs to do is take out any kind of loan to buy furniture, electronics, or appliances, even a so-called “90 days same as cash” loan. If you’re one of the 10% of people who have done this and succeeded in paying the loan off in 90 days, good for you. Most of us can’t and don’t. That means that something close to 90% of people who do this, end up with longer term debt. The amount of interest they end up paying is in the mid to upper 20% range, and its pro-rated back to the date of purchase.
About 60 days after moving to Colorado, I was able to get myself a cheap, 1-bedroom apartment. I had no furniture or appliances at all, and no radio, no stereo, no TV. The apartment came with a refrigerator, but no dishwasher (I was the dishwasher and remained in this role for over 10 years). It turns out though, that the apartment complex where we lived had started its life out in the 1960’s as a fully furnished apartment building. (that is, you could rent furniture) The managers of the apartments were trying to get rid of old rental furniture they had in storage, and they ended up giving me a couch and some other living room furniture. I slept on this couch for about 6 months. Then, the owner of the restaurant where I was working, gave us an old restaurant table and some chairs so we had something to eat on. After I got hired in a full-time office job and got my first paycheck from there, I purchased a cheap set of bunk beds for my kids, and a couple of cheap fiberboard dressers for them to put their stuff in. The Arapahoe County Sheriff’s Department adopted our family for Christmas that year, and we got a used TV, a radio, a fully decorated Christmas tree, toys, and bikes for the kids and lots of warm winter clothing, which was desperately needed.
Some people might say that it was just a matter of luck that I was able to do all of this, and that it doesn’t happen for everyone. I don’t know for sure, they may be right, but on the other hand, I did set intentions for things, I was very goal oriented, and I stayed open to whatever might happen that would put us in a better position. I avoided payday loans and 90 days same as cash offers, but this may have partly been because I wouldn’t have been able to get 90 days same as cash loan for a TV anyway. Turns out, this was a blessing in disguise.