There's always a better way

  • Published
  • By Senior Airman Amy Robinson
  • Air Combat Command Public Affairs
LANGLEY AIR FORCE BASE, Va. (AFPN) --  The Airman had $600 left until payday, which was fine -- until her car broke down, and with it, a $1,000 repair bill.

Two "friends" offered to help her out. The first offered an interest-free loan of $500. The second offered a $500 loan for a $75 fee, and said if the Airman could not pay the money back in two weeks, additional fees would be charged.

Many might think borrowing money from the Air Force Aid Society is the obvious solution. But Airmen are still using payday loans to help them get by in tight financial situations when they could be getting help from their own organization -- the Air Force.

"When (Airmen) find themselves in a desperate situation where they feel like there's nothing else and no other option, they make the decision to use a payday loan," said Gayle Brinkley, community readiness policy analyst for Air Combat Command’s directorate of personnel family matters branch.

Yet, for others, the use of these high-interest loans is attractive because of a fear of repercussions from their supervisors.

"I was an Airman, and I didn't want to get in trouble," said Staff Sgt. Darnell Cox, a munitions technician with the 1st Equipment Maintenance Squadron here. Sergeant Cox said he knew he was not necessarily being financially responsible, but he did not want others to know his business.

Sergeant Cox said he started using payday loans several years ago as an Airman after he saw a television commercial for a local payday loan lender. He did an Internet search on the nearest location and was on his way to the first of more than 40 payday loans over the next two years.

Although he paid his loans on time, Sergeant Cox said he regrets using them because of the high fees or interest rates, which can range from 391 percent to 1,300 percent annually.

"In the course of a year, I wasted $1,800 in fees alone," Sergeant Cox said. "It's money I could've saved instead of giving away.

"(The loans are) designed to keep you coming back," the sergeant said. "You figure you go over there a couple of times and you'll be good to go, but you can never make it past the loan."

Ms. Brinkley said that, like Sergeant Cox, many Airmen may plan to pay off the loan with their next paycheck; however, other expenses often arise. It happens all the time, and then it becomes a cycle until all of a sudden it is out of control.

Susie Markel, a family support center community readiness consultant, recalls a noncommissioned officer who came to the center with 10 outstanding payday loans.

"He was paying $565 every two weeks just to keep them off his back and ended up filing for bankruptcy," she said.

Not only can out-of-control payday loans damage credit, they can also damage Air Force careers, she said. Financial irresponsibility can cost an Airman anything from a letter of counseling, an Article 15, Uniform Code of Military Justice action, or in severe cases, a discharge from the Air Force.

After about a year's worth of payday loans, then-Airman Cox decided to get help from the family support center. There, he qualified for an interest-free AFAS loan that helped him cover living expenses such as mortgage payments, rent, car repairs, utilities and phone bills while he repaid the payday loans. The center even helped him develop a budget.

"They worked magic; I don't know how they did it," he said.

Like Sergeant Cox, many servicemembers may think if they borrow money from AFAS, it will get back to the first sergeant or commander, and that is not necessarily true, Ms. Markel said.

Although there may be times when circumstances require the center to inform the first sergeant or commander, AFAS loans are handled on a case-by-case basis, and the center encourages Airmen to seek assistance if they need it.

"They think it's a bad thing that they had to reach out for help," she said.

Although he is on solid financial ground now, Sergeant Cox said looking back, he wishes he would have asked for help sooner instead of worrying about getting in trouble. By getting help, he would have actually had one less thing to worry about.

"If I didn't get help, I'd probably still be stressed out about how I'm going to pay this or how I'm going to pay that," he said. "I'd be in a worse situation than I was."

Sergeant Cox said whether people get help from the family support center or a financial institution that offers a low-interest consolidation loan, there are alternatives to payday loans.

"There's always a better way," he said. (Courtesy of ACC News Service)