Small Loans for Small Bills
- By MP Dunleavey
- October 21, 2010
Times are tight. For the first time in a while, you may have trouble paying bills.
What to do?
You may have noticed an icon on the page of your utility statement online for a service called BillFloat.
As the name implies, BillFloat offers short-term loans in small amounts to cover basic household bills (they don't cover credit card payments or mortgages).
It's cheaper than a so-called payday loan, but still an expensive convenience:
"It's not revolving debt, like a credit card, explained BillFloat CEO Ryan Gilbert. "It's more like Amex. If you don't pay your Amex bill, you can't use the card."
You pay a flat rate for the loan, which includes a 3% interest charge and other service fees. On a $67 bill, you'd get charged $4.99.
You have about 30 days to repay the loan.
If you don't repay it, there are no late fees; the interest doesn't mount. You just can't use BillFloat again until you're current.
We ran the BillFloat concept past Gail Hillebrand, senior attorney with Consumers Union and a watchdog in this area. "While it's promising that they're not putting customers on a debt treadmill," she said, "consumers should still look into other options," like finding a cheaper plan, switching services or asking for an extension.
Payback. If you can't pay a bill, what do you do?
Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value
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