Quick Cash Loan Warning

By Nydia Han
We have a buyer beware for anyone using holiday "quick cash" loans to pay for your holiday gifts. And retailers are maximizing holiday sales for the last weekend of shopping.

Retailers are feeling the pressure to peddle their merchandise and make the last three shopping days before Christmas count. But get ready for crowds, some analysts predict this Saturday to be the busiest shopping day of the season.

"I think all throughout the retail industry, people have been procrastinating this year - even more so than usual," said Scott Crossin, the managing producer at QVC.

Retailers continue to offer deep discounts, additional sales and extended store hours. But one thing to keep in mind, the cutoff to order from QVC or almost any online merchant and get it shipped by Christmas has already passed.

Consumers who are looking for extra shopping money might be tempted by holiday or pay stub loans offered by tax preparers.

Some common ones include Jackson Hewitt's "holiday express" or "money now loans" or H&R Block's "instant money advance" loan.

But again, you need to beware, those types of loans come with very high fees and triple digit interest rates, which will cost you more in the long run. Another downside is that you will have to pay the loan back in one lump sum in mid-February.

Consumer advocates, like Kerry Smith of the Community Legal Services, also say pay stub or holiday loans are risky.

"These loans are made based on your pay stub not based on your W-2 from your employer so it's really a guessing game. If you're going to actually get back that full amount and you might not get back enough on your refund to pay back that loan in mid-February," said Smith.

But H&R Block told Action News that clients are approved for only a percentage of their projected tax refund and the loan that H&R Block offers has a lower interest rate and fewer fees than other alternative financial services. H&R Block's interest rate is capped at 36-percent.

If you've already taken out a holiday, pay stub, or refund anticipation loan, you can call Community Legal Services for advice. The phone number is 215-227-2400.

And we want to remind you that starting January 17th you can get your taxes prepared and filed for free by volunteers with the Campaign for Working Families.

Source abclocal.go.com