Tools to Help Break the Cycle

NAACP Chairman Julian Bond has joined the call asking Gov. Rendell to pull support from a bill that would allow lenders to charge as much as 400 percent interest for short-term unsecured loans commonly referred to as "payday loans."

How many people are familiar with the payday loan phenomenon? If you're not, click here for a useful explanation (and a cautionary tale) from About.com. It reinforces the idea that it's better to learn about some things from a distance. Close encounters with payday loans are not recommended. (And if you already knew that, or are realizing it now, perhaps you'll want to let your state legislators and the Guv know about your concerns.)

But the popularity of payday loans isn't the only glaring symptom of an over-extended society; did you know the national savings rate is at its lowest level since 1933?

More and more people are finding themselves in the difficult position of needing immediate financial help. Where do they go for that help if they don't have generous friends or wealthy relatives? For too many people the seemingly easy solution solution of a payday loan may be the only visible answer.

But if you're already short on cash, how can you expect to climb out of debt when interest rates are hovering near 400 percent? -it's like hitting the lottery in reverse.

There have to be better solutions, right?

For people trying to climb out of the vicious, often predatory cycle of consumer debt, there are programs available. One that I've mentioned in the past is Philadelphia Saves, which offers free educational seminars for people looking to achieve financial security. It's real-life, useful advice most of us could use -- not just those who are already desperate, but also those who want to learn how to avoid the trapdoors that can lead to financial desperation.

And for those already on the verge of financial collapse, there are debt management plans, like those offered through the Consumer Credit Counseling Service of Delaware Valley. They not only negotiate with creditors on your behalf, but also consolidate monthly payments and help clients configure better budget habits. And, it's a free consumer service, just like the Philadelphia Saves initiative.

Again, two useful services, in case you need help or you'd just like to improve your financial stability:

• Click here to visit Philadelphia Saves
• Click here to visit Consumer Credit Counseling Service of Delaware Valley, or schedule a confidential consultation by calling 1-800-989-CCCS(2227)