High-Cost Credit

High cost credit products comes in various forms: payday loans, car title loans, refund anticipation loans and private student loans. Find out how you can minimize your debt and avoid common traps.

Subtopics:

Car Title Loans

Car title loans are small loan secured by the title to the borrower’s paid-for-vehicle. Legal in less than half the states, title loans typically are due in full in one month and cost 300% APR plus additional fees.

Payday Loans

Payday loans are single payment small loans based on the lender holding the borrower’s personal check for future deposit. Loans cost 390 to 780% APR when lender charges fees of $15 per $100 repaid in two weeks. Click for a calculator.

Student Loans

Private Student Loans Nearly 50 percent of undergraduate private student loan borrowers fail to exhaust their low-cost federal student loans to finance their college education. Families need help understanding college financing.

Tax Refund Loans

Refund anticipation loans are loans secured by taxpayers’ anticipated tax refund. RALs cost 50 to over 500% effective APR and are repaid in less than two weeks by deposit of tax refunds from the IRS.

Policy and Legislation

Consumers Union News Releases

Research and Reports

Consumer Tips

Blog Posts

It's time Washington looks out for us!

It's time Washington looks out for us!

If you don’t think it matters having an aggressive watchdog in Washington looking out for consumers, just consider your credit card bill. The full House just approved a new financial sheriff – now we need the Senate to do the same so we don’t have to endure more abusive tactics. Tell your Senators you want a watchdog who looks out for us. Act Now!

Tell Us Your Story!

Are you in debt because of short-term loans? Whether backed up by your paycheck, your car title or expected tax return, the results are the same: You end up paying too much to borrow a small amount of money, and usually at a time when your financial situation is the most desperate. Tell us your experience.

We want to hear from you. Your willingness to share your stories helps us pass laws to protect you and your family.

Read stories from individuals who have shared their stories, like:

Alex of San Francisco, CA
I'm falling further and further behind on the debts. I'm 77 years old, living in a studio apartment in downtown San Francisco. I survive most of the time on beans.

How to complain to the Government

Online, by mail, phone or fax... Agencies need to hear from you!

Press Mentions

"These fees are like germs." by Kathy Chu, USA Today (May 28, 2009)
But the aggressive fee increases, consumer advocates say, underscore the need for regulators to crack down uniformly on bank practices that are pushing consumers deeper into debt - whether on credit cards or checking accounts. "These fees are like germs. They have a tendency to spread," says Gail Hillebrand, senior attorney at Consumers Union, which publishes Consumer Reports. The fees are "all based on the same bad business model," she says, in which consumers are promised one price and then later are loaded up with back-end fees.
Credit card consumer protection law may reduce purchasing power by Alexis Leondis, Bloomberg (May 22, 2009)
Credit-card companies will still be able to price according to risk, said Gail Hillebrand, a San Francisco-based attorney for Consumers Union. The legislation will ensure that the cost of borrowing money is disclosed at the outset instead of luring risky borrowers with a low introductory rate, she said.
Credit card protections come with some holes by Kathy Chu, USA Today (May 20, 2009)
Most of the provisions take effect nine months after the bill is signed into law — so likely in February 2010 — giving credit card issuers ample time to raise rates or fees. "This is a strong package, but it's a disappointment" that the protections won't take effect until next year, says Gail Hillebrand, attorney at Consumers Union

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