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There's always a better way

8/12/2005 - LANGLEY AIR FORCE BASE, Va. (ACCNS) -- 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 couldn't pay the money back in two weeks, additional fees would be charged.

So who would you borrow from the Air Force Aid Society or your local payday lender?

The answer might seem obvious, 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 the Air Combat Command 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 journeyman with Langley's 1st Equipment Maintenance Squadron. Sergeant Cox said he knew he wasn't necessarily being financially responsible, but didn't want others to know his business.

Sergeant Cox said he started using payday loans several years ago as an Airman after he saw a TV 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 the Airman paid his loans on time, he 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, said Sergeant Cox. Its 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 explained 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 its out of control.

Susie Markel, Langley Family Support Center community readiness consultant, recalls an NCO who came to the FSC 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.

She explained that not only can out-of-control payday loans damage credit; they can also damage Air Force careers. Financial irresponsibility can cost a member anything from a letter of counseling, to an Article 15, Uniform Code of Military Justice action, or in severe cases, a discharge from the Air Force.

After about a years worth of payday loans, the then-Airman Cox decided to get help from Langley's FSC. 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.

But like Sergeant Cox, many service members may think if they borrow money from Air Force Aid Society, it will get back to the first sergeant or commander and that's not necessarily true, said Ms. Markel, Langley FSC community readiness consultant.

Although there may be times when circumstances require the FSC 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 its a bad thing that they had to reach out for help, she said.

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

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

Sergeant Cox said whether people get help from the FSC 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.

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