Money Blue Book

Cheapskate, Appropriately Frugal, or Brilliantly Simple? You Decide

Well we’ve finally reached the dog days of summer - the hottest stretch of heat sweltering days of July and August. For those of you who live in colder climates, bless your hearts - enjoy the mild temperatures while you can because colder weather will be upon you soon. But for everyone else who lives in a state or region that enjoys four seasons year round with hot and humid summers like I do, it’s time for all of us to get outside and enjoy that nice sunshine warmth.

One of the best ways to get some mild exercise, and enjoy the great outdoors with the family at the same time is to visit an amusement theme park like Six Flags, Busch Gardens, or Disney World. Now you might be thinking to yourself - wait, visiting an amusement isn’t exercise and it sure isn’t the great outdoors. Where is the huffing and puffing, and where are the essential greenery that make up the great outdoors? I guess that’s where you and I differ - I consider the great outdoors to be anywhere that’s not cooped up inside an air conditioned house or apartment on a summer’s day spent watching TV or playing Nintendo Wii. As long as you are out and about, walking around outside, enjoying the sun’s natural Vitamin-D inducing rays, you are immersed in the great outdoors my friend.

In addition, all that walking around, waiting in line, and strolling from roller coaster ride to concession stand is definitely exercise. It’s not exactly running an Olympic marathon, but you’ll likely burn off some needed calories in the process. The last time I went to Six Flags, my poor puppies (my weird slang for feet) ached after walking around all day. I visited the amusement theme park during pre-season so the lines were incredibly short and non existent, prompting me and my travel companion to walk around even faster to ensure we hit every single roller coaster ride and gaming stand by day’s end. It was a fun, but rather tiring and dizzying experience.

You’re Getting Off Track Again - What About The Free Roller Coaster Photos?

Now, anyone who has ever been to one knows that spending a day at the amusement park does not come cheap. In fact, most places are pretty expensive and if you’re not careful about your budget or keep a tight reign on careless spending on snacks and drinks, you mind find yourself blowing more money than expected - just like you do at the movies. At amusement theme parks like Six Flags, you can expect to shell out anywhere from $25 to $50 per person depending on your age and height, and even more on top of that for meals and other gaming experiences. At mega theme parks like Orlando Florida’s Disney World resorts, tickets range anywhere from $70 for young children to more than $160 for adults for multi-park access. Thus, any little thing you can do to cut costs here and there will help you save lots of money in the long run and prevent you from losing your financial mind.

Here’s a little tip I picked up a while back on how to get free roller coaster photographs of yourself and free on-board pictures of your friends at any amusement theme park. After every major roller coaster ride, as you’re walking down the exit ramp rather dizzily from the experience, you’re likely to bump into the ubiquitous roller coaster souvenir photo booth. At the stand you’ll usually find a sales counter along with multiple television monitors mounted high up, cycling through live digital photo shots of roller coaster riders taken in various stages of facial displays ranging from joy and happiness, to sheer terror (but they are usually all funny). The images are all photos automatically taken by strategically mounted on-ride cameras located throughout the track. Oftentimes, the cameras are installed on segments where the riders experience the greatest speed, resulting in a variety of funny displays of wacky and distorted expressions due to excitement, fear, or just plain wind resistance. Sometimes, all occupants of a single roller coaster car are displayed in one photograph, and sometimes only two or four people are displayed at one time. The photos on the display screen are usually numbered and park customers willing to purchase their own can do so. The instant photos are usually available immediately after the ride is over should you choose to buy them - and they frequently come in a variety of specialty trinket forms like T-shirts and key chains. The prices charged however, are frequently expensive rip off prices. A tiny wallet size photo may cost in excess of $15-20 each. Larger photos may be priced as high as $25-$35 each. Keychains and T shirts can easily cost in excess of $25-$45.

For those who want to get their roller coaster photos for free, you’ll have to act fast as soon as the ride is over. Usually the rollercoaster souvenir booth video displays cycle through the most recent ride results from one car to another before moving on to the next set of new vehicle riders. As guests exit the ride, the display screens update the photos with the latest riders, thereby gradually burying the photos of riders that came before. If you want to save some money, take the limited time opportunity to raise up your digital camera, zoom in, and take a direct digital photograph of the display screen when your rollercoaster shot cycles through. You’ll want to act fast as your photo will likely only be flipped through a few times before disappearing for good. If you’re quick, you just might be able to walk away with a high quality, free roller coaster self shot.

The last time I was at Six Flags, I did just that for numerous rides. It sort of baffled me at the time why no one else was doing it though. As soon as I saw the screen display of my friend and I, I raised my Canon Digital Elph sky high to rise above the crowd of riders waiting to buy souvenir photos, and quickly snapped off a few free shots. As soon as I did that, everyone looked at me with eyes widened, and immediately took out their own cameras to do the same - frantically snapping their own self pics as the display screens flipped to images of them. Such frugal tips seem so common-sensical that we oftentimes fail to realize that we can easily get many things for free just by trying.

Financially or Morally Ethical? It’s Up To You - But Remember, You Did Pay The Price Of Your Pricey Admissions Ticket

While I doubt Six Flags, Disney World, Disney Land, Kings Dominion, Busch Gardens, or Cedar Point officials condone this type of free photograph taking, I’ve never noticed any signs or ticket stub fine print restricting this frugal (albeit freeloading) practice. Support the park and pay your $35 roller coaster souvenir photo at Kingda Ka or any other popular ride if you want. However, in my opinion, you’ve already paid for your price of amusement park admission, so you might as well maximize your budget by taking advantage of free photographing opportunities. Once you snap a photo with your digital camera, you can pretty much make as many digital prints as you want.

I suppose the lawyer part of me feels compelled to address one more concern. As for questions about copyright infringement legalities, don’t worry. Copyright laws only protect the rights of actual tangible mediums of expression whether it be an expression of writing, photography, or music. Yes it would be a possible copyright violation if you were to copy the digital photographs off of the souvenir booth computers directly and reproduce them (that might be considered criminal theft as well). But by using your own personal digital camera to take a photograph of the monitor indirectly, you are in the clear. Feel free to snap away. You are now your own paparazzi!

Updated List Of The Best Credit Card Cash Back Rewards For Google Adwords, Yahoo Search Marketing, and MSN AdCenter

As a personal finance blogger and a dot com mogul-super affiliate tycoon wannabe (I’m joking), I regularly spend sums of money on domain name registrations, web hosting services, and home office computer supplies. However, the bulk of my tax deductible business expenses consist of expenditures for online advertising through top search engines like Google, Yahoo, and MSN. While compared to the big boys (and girls) my advertising budget is comparatively puny, I still seek to maximize my money however I can, whether that means utilizing free promotional coupons for extra savings and free online advertising, or taking advantage of credit card offers to earn cashback rebates on Google Adword purchases.

Online Advertising Through Pay Per Click Works, But It Can Get Expensive Depending On Subject Niche

Those who are familiar with online advertising know that there are a variety of ways and methods to get your website brand or blog name into the search engines and thus into the public eye for maximum traffic. However, this doesn’t necessarily mean that all of the methods are created equal. Currently the most popular search engine with the most capability to leverage the most search traffic by far is run by Google. But while the Google Adword program’s certainly the most dominant player in the online marketing world, there are also other lesser options worth mentioning - most notably Yahoo Search Marketing and Microsoft’s MSN AdCenter. Neither Yahoo Search nor MSN AdCenter are likely to topple the 800 pound gorilla of Google Adwords anytime soon, but the smaller search sites still own a small, albeit dwindling piece of the search engine pie.

For those who spend money on internet advertising through Google, Yahoo, or MSN, probably the bulk is spent on paid text link advertising or pay per click (PPC) promotional campaigns. Both paid text links and PPC advertising are used by many bloggers and website promoters to generate traffic needed to convert organic search traffic into profitable affiliate sales. Personally, I highly advise against engaging in buying or selling paid text links, and refuse to engage in paid text link buying or selling myself. The frowned upon practice is a form of marketing suicide in my opinion, and is the number one way to incur the wrath of Google, which sees the buying and selling of paid backlinks as a form of guerrilla attack on the integrity of the Google search engine algorithm.

In contrast, pay per click advertising and the purchasing of approved advertisement links through Google, Yahoo, or MSN’s network of publisher banners and ads are proven and permitted ways to drive website traffic. However, as anyone who engages in pay per click advertising or other affiliate marketing means through Google Adsense or Yahoo Ads knows, the cost to promote a successful PPC ad campaign isn’t cheap. While newbies to internet advertising are unlikely to spend much money initially (a few hundred dollars a month at most), larger scale promoters frequently spend upwards of hundreds to thousands, or even hundred thousands, of dollars on monthly pay per click advertising alone.

Use Credit Card Rewards To Save Money On Online Business and Advertising Expenses (Google Adwords, Yahoo Search Marketing, MSN AdCenter)

Smart business types should always try to find ways to minimize business expenses and utilize as many discounts and promotional offers as possible to net the greatest overall profit. One of the best ways for bloggers and affiliate marketers to save money in this area is to maximize and strategize their use of credit cards rewards. Presuming you are savvy and responsible with your usage of credit, and maintain a respectable FICO credit score to boot, reward credit cards are essential ways for online entrepreneurs and advertisers to maximize their small business spending. Surprised that there are credit card reward programs dedicated and suited for web based businesses and online marketers? Don’t be! While Yahoo and Google credit card advertising rewards are not as well known as say, credit card discount programs for groceries and gas, the area is a steadily growing (albeit not fully tapped) segment of the credit card rewards market. Currently, most of the best cash back credit card rewards for bloggers, webmasters, and internet marketers are not widely advertised, and to get the details requires some digging, which I’ve done below.

For the tax minded business folks who wonder if there is an income tax on credit card rewards or aren’t sure whether one is obligated to report all cash back rewards and point rebates earned through the use of credit cards, rest assured - there is no such tax. Credit card rewards earned by consumers and businesses are viewed as purchase incentives by the Internal Revenue Service (IRS) in the nature of discounts and coupons, not subject to personal income tax liability. So don’t miss out on the cash back savings and discount potential of specialized credit card incentive programs designed to help you finance and pay for your online advertising and promotional efforts.

1) Google Adword and Adsense Pay Per Click Advertising - Get Up To 5% Cash Back With Reward Credit Cards

Until the day Google announces the release of its long awaited Google credit card and starts up its own Google credit card rewards program, the following card offers are your best bet when it comes to earning cashback for money spent on Google advertising. Personally, I can’t wait for Google to come out with its own Google credit card and would be the first to camp out in line for something like that - I’m quite the Google fan. Just the thought of earning Google rebate rewards on a percentage of all Adwords expenditures and the ability to redeem points for either cash or Google branded products like T shirts, mouse pads, and even portable Google fridges would be quite lovely. I used to carry around a Yahoo credit card back when Yahoo offered its own card program. When they eventually discontinued the Yahoo credit card rewards program, I was sad to see it go. It was pretty neat being able to redeem points for cool Yahoo T-shirts and other merchandise - techie stuff you couldn’t get anywhere else.

In the meantime, for those of you who spend a lot of money or even just a little bit on Google Adwords and Google Adsense advertising, here are the best credit cards cards to help you save money and get cash back rewards on your PPC advertising efforts. The rewards you earn can be used for whatever you wish, including plowing them back into more PPC marketing. While Google does not currently have any special deals with any particular credit card issuer to offer Google discounts, there are a few specially suited cards for such purposes.

1. Advanta Platinum BusinessCard For Online Marketers - Also known as the Advanta Platinum Business Card With Customized Cash Back Options, this card offers cardholders the ability to earn as high as 5% cash back on all online marketing expenditures. It’s probably the best overall reward credit card for new bloggers and affiliate marketers who are just getting into the PPC advertising scene. The expenditures that are covered include Google Adwords, Yahoo, MSN Search, and eBay fees. The Advanta rewards program also covers office expenses as well. The high 5% rebate rate is only provided for the first $1,500 of qualified expenditures, and after that it’s a tiered 1% cashback on everything spent.
2. Advanta Kiva Business Card - With the Kiva business credit card offer, online marketers get to earn up to 5% cashback on money spent on online advertising services like Google Adwords or Yahoo Search. There are no restrictions as to which affiliate or ad network must be used. The card also earns up to 5% cashback for business office related expenses like gas, computers, utilities, and even charitable contributions. There is also a nice 0% balance transfer offer for 15 months.
3. American Express Plum Card - With the highly advertised Plum Card from American Express Open (the Plum card yogurt commercial is everywhere on TV these days), you get an astounding 2% cashback rewards on everything purchased with the card if you pay within 10 days of your billing cycle. The catch is you’ll need to spend above $5,000 a month with your Plum credit card. Anything less and you’ll only earn 1% cashback. Of course, the card was designed for big time spenders and small businesses with high expenses. If you spend a lot of money on Google Adwords or other forms of advertising, you may want to think about the Amex Plum card. There is a hefty $185 annual fee that’s waived for the first year, but it’s easily worth it if your business spends a lot of money on online advertising or other business expenses.
4. Fidelity Rewards Signature Card - While the card requires a Fidelity Investment broker account to maximize rewards earning potential, if you’ve got one or are willing to sign up for one, you can earn 1.5% cash back on all your online advertising efforts. Actually, coupled with a Fidelity account, the card allows you to earn an effective 1.5% cashback on all products and services you purchase with the card, with no category or store limitation. Most comparable card programs only offer 1% back for general purchases so if you are a major spender, this is an ideal and recommended card to get. The Fidelity Signature is one of the reward cards I use on a regular basis.
5. Chase Business Cash Rewards Card - With the Chase Business Cash Rewards offer, online entrepreneurs and small business owners can earn up to a tiered 5% cashback on all purchases with no merchant or category restrictions. Your rewards earning potential is unlimited and there is no restriction as to how much you can earn. Your cash back percentage rate rises and falls depending on how much you spend per month. For online marketers who expect to spend more than $2,000 a month on Google Adwords (that’s when the high 5% kicks in), this is a nice card to have.

2) Yahoo Search Marketing - Get 5% or More CashBack Savings Using American Express Business Credit Cards

Currently, savvy online entrepreneurs have the ability to take advantage of American Express’ Open Network Business credit cards to net themselves more than 5% cash back rewards when they spend money on Yahoo Search Marketing services. Through a special partnership between Amex and Yahoo announced not too long ago, American Express business credit card users will now get to enjoy a 5% discount on all their Yahoo based advertising and web promotional expenditures simply by using their Amex business cards. This not only includes pay per click advertising using Yahoo’s Search Marketing, but also includes Yahoo publisher services ranging from web site hosting, e-commerce, to domain name registration.

While Yahoo is not the most popular or even a serious contender in second place, its PPC advertising fees are substantially lower than that charged by more popular services like Google Adwords where greater bidding competition among advertisers drives up promotion costs - making Yahoo a cheaper, but still viable alternative. Besides, it’s good to diversify one’s advertisement methods. One can even take credit card rewards one step further. Currently, there are certain select Amex business cards that offer even more lucrative rebate rewards on top of the existing 5% discount for Yahoo services. All of the following American Express Open business credit card offers below offer additional cumulative rewards on top of the 5% discount on Yahoo Search Marketing:

1. Blue Cash For Business Amex Card - With this high earning business credit card offer, you have the potential to earn up to a tiered 5% cash back rebate on eligible special category purchases. For everything else, including PPC advertising expenses, you get a tiered 2.5% cash back rewards rate. The special purchase categories include gas stations, drug stores, and supermarkets. In addition, Amex business cardholders also get to enjoy the usual Amex Open network savings on free hotel stays, car rentals, and airline travel.
2. American Express Business Gold Rewards - This popular premium small business card with no preset spending limit can help you save up to 25% off your business expenses. There is an unlimited rewards earning potential on purchases and your Membership Rewards never expire.
3. American Express Platinum Business Card - This business card from Amex is a popular choice to earn purchase rebates redeemable for retail, entertainment, and dining rewards. There is no annual fee and there is no limit to the number of points you can earn.
4. American Express Simply Cash For Business - You can use the card to earn 5% cashback on wireless services and home office supplies (like laptops and office gadgets). You also get 3% cashback on gas and 1% for everything else. There is no annual fee and no rewards limit.

3) MSN AdCenter - Get 3% Cash Back Rewards By Using Mastercard Business Credit Cards

Currently, Microsoft’s MSN AdCenter has a partnership with Mastercard’s network of business credit cards to offer MSN AdCenter advertisers 3% cash back rewards on money spent. While American Express is the card of choice for most business owners, the MasterCard partnership with MSN AdCenter makes Mastercard sort of a must have for heavy or even mild users of MSN’s advertising network.

To be eligible for the 3% cash back savings, Mastercard business credit card holders need to register and enroll their cards into the Master Card Easy Savings Network. While fairly straightforward, you can review the MasterCard Easy Savings FAQ if you need more info about the program. Keep in mind, along with the 3% rewards you can earn on all MSN AdCenter expenditures, you still get to earn the usual credit card rewards (if offered) on top of that. This has the potential to effectively boost your total reward earning percentage way past 3%. Here’s a list of the best Mastercard business credit cards for MSN Ad Center affiliate marketers and pay per click advertisers:

1. Advanta Platinum Business Customized Rewards Mastercard - This business credit card option by Mastercard is your best bet when it comes to maximizing your MSN AdCenter savings and online advertising spending in general. Along with the ability to earn 3% reward savings on all MSN AdCenter expenditures, you also get to earn an extra 5% cash back rate (with purchase limits) on top of the 3% for money spent on fees with online advertisers and merchant sites like Google Adwords, Yahoo, and even eBay. You also get cashback rewards for money spent on utilities and telecommunications, not to mention additional business savings for computer electronics and related office supplies as well.
2. Chase Business Rebate Mastercard - Earn up to 3% cash back on office supplies, restaurant dining, gas, hardware, and home improvement expenditures. Currently there is also a long 15 month 0% APR balance transfer promotional period as well.

My Advice and Guide To The Risks Of Using Pay Day Cash Advance Loans

When it comes to the subject of money and finance, certain things seem to inherently come with bad raps, and it’s not always deservedly so. As someone with a legal background, I feel that I’ve been naturally trained and conditioned to reflexively see both angles of a debate. Generally, I can take either opposing positions of a controversial issue. For example, when it comes to credit cards, I can see both the negatives and the positives. Some see credit cards as the scourge of consumer debt, and the ultimate symbols of excessive consumerism and financial servitude, responsible for trapping generations of consumers into irresistible cycles of minimum payments and high interest credit card debt. But at the same time, I can also see the rewarding aspects of credit card usage - the ability to use a powerful and versatile financial tool to not only build much needed credit history, but to make money and earn cash back rewards through responsible use and management.

However, even with a self proclaimed balanced view towards the use of semi-controversial financial tools for arbitrage profit and monetary gain, there are some practices out there I am reluctant to defend. Currently, I’m loathe to take a positive stance when it comes to the area of payroll advance loans and high interest short term cash advances. While I begrudgingly admit that payroll cash advances do serve a certain purpose and that there is an unmet need in the marketplace for their existence, I still see them as the pinnacle manifestations and ultimate symbols of financial distress, familial desperation, and loan sharking. Allow me to share some of my research and thoughts on the matter.

What Are Payroll Advance Loans and Where Are They Obtained?

Payday advance loans are a type of very high interest, short term cash loans used by lower to middle income people with jobs, usually during times of great financial turmoil and desperation. Payday loans have many names either formally or colloquially, including - cash advance, quick cash, post dated check loans, payroll advance loans, deferred deposit lending, and even loan shark advances. Pay day loans are almost always taken on by people who are experiencing some type of financial emergency and temporary cash shortfall that necessitates the use of risky short term loans to meet that monetary need. Oftentimes, consumers who find themselves pressed into seeking out payday cash advance loans do so because of their lack of preparedness to handle large bills arising from things like sudden medical expenses, unexpected car repairs, large electricity bills, and overextended rental payments.

Payday cash advance services can be found in most cities, at least in states that haven’t outlawed or made the practice illegal. While previously limited to stores found in low income neighborhood slums next to liquor stores, bail bonds, and gun depots with barred up windows, many are now poking their collective heads into well trafficked downtown area malls and mainstream commercial centers. Currently, payday loans can be obtained at many Western Union cash checking type stores, at standalone payday lending storefronts, and even in many pawn shops. As select states have gradually begun to legislate against the practice of payday lending, many cash advance stores are now bypassing individual states and heading online to do business. A great number of new payday loaners can now be found through search engines and pay per click online ads - the new frontier for customers and businesses.

Who Uses Payday Loans and Why Would Anyone Resort To Using Them?

So what type of person represents the typical payday loan user? The answer might surprise you. No, it’s not the drug addict, dead beat dad, or even the homeless guy who roams the streets, despite commonly held stereotypes to the contrary. The typical payday loan user according to some news research reports, and U.S. census bureau data from 2000 - is a lower middle class individual with a steady job, with average annual household income of around $40,000 who has bills to pay but has exhausted most financial alternatives. Thus it seems evident that payday loan consumers are generally not financial indigents or those who are unemployed. They almost always work a steady wage paying job, but struggle mightily with paycheck to paycheck living and their inability to pay down debt and deal with recurring daily expenses. However, the idea still persists in the public’s mind that payday lending stores prey upon the downtrodden through the use of predatory lending practices. In one of its many attempts to dispel the notion that the payday lending industry preys upon less educated, low income families, military personnel, and even immigrants, the nation’s largest payday lender, Advance America (link) (absolutely NOT an endorsement) points out that 90% of payday loan users have at least high school degrees with almost half of all loan applicants owning their own homes. While these statistics help to temper my perception somewhat, they don’t really change the negative opinion I hold about these risky, high interest financial traps.

In almost all cases, the eligibility requirements to receive a payday loan are all too easy to meet - you merely have to be at least 18 years old, have a steady job with reliable wages, have a funded bank checking account, and you must have appropriate financial documentation like pay stubs to prove your income status. While some lenders demand that cash advance borrowers possess a phone, have residency status, or have at least $1,000 or so of monthly income, in most cases, not much personal or financial information is needed other than documentation of income. Not even a credit check is required. By definition, consumers of high interest pay day loans are usually cash-only spenders with shoddy or ruined credit at best. Otherwise, they probably would have gone with credit cards or utilized more mainstream ways to acquire loans exhibiting more favorable terms.

How Do Payday Loans Work and Why Are These High Interest Cash Advance Loans So Fraught With Hidden Dangers?

Payday loans are usually obtained by the financially distressed via the many paycheck anticipation loan storefronts that dot the landscape and via the many payday loan websites that can be easily accessed online. While “more reputable” and socially accepted lending institutions like banks and credit unions usually require borrowers to undergo necessary hoops and hurdles to qualify for loans, payday lenders are notoriously well known for their service with a smile and the relative ease in the way they rapidly approve consumers for these risky high interest loans. The convenience of instant approval is why they are so attractive to the financially desperate. Customers are usually only required to provide the most basic of personal information pertaining to themselves, although sometimes they are required to provide some names and phone numbers of family and friends for reference purposes (presumably to track you down in case you don’t pay back your loan). The application and approval process frequently only takes minutes from inquiry to cash in hand. This rapid approval process is also how most payday lenders seem to justify their outrageously high transaction fee charges. Their explanation is that the high cost of quick approvals, assumption of higher default risk, and distribution of extremely short term loans demand much higher premiums on customers and require higher rates of return on loans offered for themselves.

Payday advance loans are offered by lenders for very short periods of time - usually anywhere from 2 weeks to 1 month at the very most (with the option to renew). Once approved, the applicant is required to write a check to the payday lender for the amount of the loan (usually anywhere from $100 to $500) plus an extra payday loan fee that the lender will ultimately keep. This is the where the devastating payday loan trap springs into action and why their use is so despised by many - the interest and payday loan fee that lenders charge is absolutely outrageous and insanely high.

Let’s say you want to borrow $500 for 2 short weeks to pay off your rent or some type of utility bill that is overdue. You have an employment payroll check coming in at that time that will allow you to pay the loan back plus fee. Most payday lenders will charge you a whopping $100 or more fee to lend you that amount. If you want to borrow $500, you will need to write the lender a post dated check for $600 ($500 plus the $100 fee), posted to be cashed in 2 weeks. The check is held by the lender to ensure you will ultimately pay. In the process, this creates an incredibly high potential annual percentage rate (APR) of (brace yourself) - 521% interest. No, that is not a typo - it really is that high. When the payday advance loan comes due in 2 weeks, the entire $600 is owed in full. However, pay day lenders frequently offer the option to roll over, or renew the loan. Instead of cashing the $600 when the short term cash advance comes due, payday lenders often encourage borrowers to pay another $100 fee to extend, or flip the loan for another two weeks. Oftentimes, cash strapped borrowers are unable to pay the hefty full $600 and are forced to pay the new fee instead. In the process, the borrower is not getting more money, but is merely floating and rolling over the same loan money he received in the beginning. If not paid in full as soon as possible, what started out as a small loan can quickly balloon into a monstrous debt.

The greatest payday loan danger occurs when consumers fall into this destructive pattern of chronic payday loan borrowing. The cycle of financial devastation can be potentially crushing. Just think - let’s say you took on that original $500 payday loan for 2 weeks and at the end of the 2 week period you were unable to pay off that loan plus the fee so you kept rolling the debt for 6 more cycles (2 weeks each) for a total of 12 weeks, or about 3 months give or take. By floating the cash advance loan 6 times, you’ll have paid out $600 worth of payday loan fees. At the end of the period, you’ll have to pay out an astounding $1,200 out of pocket cost to cover what was once a manageable $600 loan. If not paid off quickly, payday loans have the potential to make credit card debt seem like a minor nuisance in comparison.

The Growing Governmental Regulation and Legal Opposition To PayDay Advance Lending

It’s difficult for me to say anything positive or in defense of the payday loan industry despite my general willingness to let free market play itself out. After all, on some level it’s hard to deny that there is a thriving market for these types of short term, instant cash loans to pay down short term debt and bills. Instead of blaming payday loan companies, maybe we should be blaming the mainstream banks and credit card companies for not doing a better job of providing more accessible outlets for this type of consumer need. But regardless of the niche that they fulfill, in the interest of protecting the public from such imbalanced financial transactions and to shield people from such potentially predatory risks, many states are starting to crack down. Currently, some state legislatures have already made payday loans illegal and outlawed the practice. Many states are even in the process of enacting usury laws that impose caps and limits on the amount of interest that short term payday lenders can charge, effectively putting them out of business in those states. Currently, payday loans are illegal in the states of Arkansas, Connecticut, Georgia, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont, and West Virginia (but this roster may change as prohibitive laws are challenged by lobbyists for the industry). While not illegal in Washington D.C., caps on payday loan interest of 24% APR (essentially a mere 92 cents on a $100 loan) has effectively driven out all lenders in the district. Other states have imposed mandatory longer lending terms to give consumers more of a fighting chance.

The dangers of payday loans and their perceived blight on society is also why the federal government has stepped in as well, into an area that has been primarily regulated by state governments. The United States enacted a law that became effective in 2007, capping short term cash advance loan interest rate to 36% APR for all military personnel, citing the terrible financial distractions and conflicts of security interest that they cause. While this rate cap may still seem pretty high, the rate restriction limit is mere pennies compared to the nearly 500% APR or more that payday lenders used to charge civilians, and military service men and women. However, as a result, payday stores simply stopped lending to military personnel altogether, forcing needy servicemen and women to look elsewhere, a rather disconcerting thought.

Of course, with the increasing regulatory efforts, many payday lenders have migrated onto the Internet, a rather disturbing trend, but perhaps a sobering reminder that their presence in some shape or another fulfills a need in society whether we like it or not. They may not be available now in all states, but financially desperate borrowers still seem to seek them out.

For those of you who insist on seeking out payday loans, I highly advise you to reconsider. There are options and alternatives out there my friend. While payday advances may seem attractive and easy to obtain, it’s a financial debt/death trap in waiting. Unless you are absolutely certain you have the means to pay off the short term loan in one loan cycle, don’t even think about it. Why not consider other more reasonable alternatives to payday loans?

Much Better Financial Alternatives To Getting A Pay Day Cash Advance:

• Ask your existing creditor, lender, landlord, or bill collector for additional time to pay your bill in full. This is the quickest and most recommended way to get yourself out of an immediate cash shortfall. Unfortunately, this option is not always dependable as not all of your existing creditors will be agreeable to this type of generosity.
• Borrow from your friends or family instead if you can. Put the short term loan in writing and back up your good word with future action.
• Perhaps you can request a one time or temporary pay advance from your employer. While it may not look good in the eyes of your employer to ask for a pay advance, desperate times do require more desperate measures.
• Get a short term loan from your bank or credit union, or apply for a 0% balance transfer credit card offer. If your credit score is still salvageable, the 0% balance transfer option is the recommended way to go. I’ve personally used 0% APR balance transfer cards to get myself through difficult financial jams before. Read this guide to 0% balance transfers if you don’t know what they are. Transferring existing high interest debt to 0% APR credit cards works.
• Try visiting a pawn shop instead. While pawn shops and pawn brokers still charge rather hefty interest and fees for loaning you money in exchange for collateral as security, their rates tend to be on par with that imposed by credit cards. If you must choose, I suggest going with a pawn shop instead of a payday storefront branch. It’s a bit more paperwork to come up with the right collateral, but the terms are better.

Where To Find The Best Payday Loan Lenders Online (If You Insist On This Course Of Action)

While payday loans do serve a need, always seek out better options first! I will admit I’m no expert when it comes to finding the best payday loan lenders. While I occasionally recommend sites in the form of affiliate recommendations, I’m extremely leery of inserting payday loan affiliate links here. Instead. you can find payday lenders through Google searches, online banners, website ads, and through the Community Financial Service Association (CFSA)’s list of CFSA member payday loan companies. Despite the organization’s name, the CFSA represents the payday advance industry’s interests completely and does not have your best interest as a consumer in mind. The list of approved payday loan companies is provided only as a useful resource and not as a recommendation of any of the companies listed.  While it’s a financially morbid choice I would prefer not to make, I’d rather you get financially ripped off by a “reputable”, industry-certified lender because you affirmatively decided you must get a payday loan, than get yourself ripped off and have your identity stolen via some unscrupulous and unknown payday loan scammer’s website.

Have you ever wondered how credit card companies generate all those account numbers that appear on the face of the credit cards you carry around in your wallet? At first glance the numbers, while neatly arranged, appear to be completely random. But would it surprise you to know that there is indeed meaning and actual mathematical methodology to the way the numbers are sequenced? The process of generating real credit card numbers and validating them based on a proven mathematical formula is not only intriguing on an intellectual level and a hacker’s dream, the carefully calculated way the numbers are ordered is actually quite beautiful and elegant when you come to understand how it works.

Before I get down to explaining the anatomy of credit card numbers and discussing how credit card numbers are generated, I think it’s prudent to remind everyone the intent of this article. The goal of this blog post is not to encourage or get people thinking about how to go out and create fake credit card numbers on their own for improper means. The purpose is to shed some light on the science behind the mathematical sequencing technology of valid credit card numbers and offer some insight into something that many of us frequently see and use everyday, but oftentimes don’t pay much attention to.

Please take in the information provided for purely academic and entertainment reasons. I’m not trying to encourage anyone to create fake credit card numbers and get themselves in trouble with the law. For anyone even thinking about engaging in fake credit card number hacking, keep this in mind - using mathematically generated credit card numbers to purchase products over the Internet or in real life is not only unethical and highly illegal, it’s also not yet technologically possible (yet), based on the sheer probability of long shot odds of 1 in trillions. After reading everything I’m about to say carefully, you’ll also realize that there is no realistic way to generate actual working credit card numbers that could be used for anything but entertainment reasons. The math and science behind generating authentic credit card numbers are only good for validation purposes and not sufficient for creating workable numbers as several highly encrypted numerical components are still needed. So, with that obligatory disclaimer out of the way, here is a short guide on how anyone can generate and verify the authenticity of any credit card number.

Basic Background About Credit Card Numbers and How They Work

Rather than ask you to take out a credit card out of your wallet to examine it, I’ve provided a picture of a prototypical card - in this case, it’s a Visa credit card. While different card types offer different lengths of numerical digits, most major credit card issuers popular in the United States have 16 primary numbers on the front face of the card. Visa, MasterCard, and Discover cards all have 16 digits. American Express is the only major credit card issuer in the U.S. with one less number - at 15 digits. Regardless of the length of numbers, their numerical sequencing is still guided by the same Luhn validation formula, the mathematical check sum equation that makes all valid credit card numbers error free.

As you can see from the picture of the Visa card above, the very first 6 credit card number sequence is known as the issuer identification number (IIN) or bank identification number (BIN). These first 6 numerical digits denote the credit card network and the banking institution the card is a member of. The issuer identifier number also incorporates the card type’s special identifying numerical prefix.

• All typical 16 digit Visa account credit card numbers start with a prefix of 4.
• All 16 digit MasterCard account numbers start with a prefix of 5.
• All 16 digit Discover account numbers start with a prefix of 6011.
• All 15 digit American Express credit card numbers start with a prefix of 37.

There is less randomization during this initial set of 6 digits as the numbers are determined purely by the card issuing source. Validation systems that want to go the extra mile in verifying authenticity oftentimes scan this first numerical sequence to match the known bank and issuing location of the card with the provided customer billing address for further validation accuracy.

The lone digit at the very right end of the complete 15 or 16 digit credit card number sequence is known as the “check digit”, which often is the final number that is computer generated to satisfy the mathematical formulations of the Luhn check sum process. Meanwhile, in between the first 6 digits and the last single check digit is the actual personalized account number - the 8 or 9 digit sequence given by the card issuer. For more basic background information about credit card numbers, check out this credit card features brochure for more useful knowledge about the embossed and printed information found on your typical plastic credit card.

What’s The Secret Behind The Luhn Algorithm, Also Known As The “Modulus 10″ Or “Mod-10″ Formula?

The Luhn Algorithm is the check sum formula used by payment verification systems and mathematicians to verify the sequential integrity of real credit card numbers. It’s used to help bring order to seemingly random numbers and used to prevent erroneous credit card numbers from being cleared for use. The Luhn Algorithm is not used for straight credit card number generation from scratch, but rather utilized as a simple computational way to distinguish valid credit card numbers from random collections of numbers put together. The validation formula also works with most debit cards as well.

The Luhn formula was created and filed as a patent (now freely in the public domain) in 1954 by Hans Peter Luhn of IBM to detect numerical errors found in pre-existing and newly generated identification numbers. Since then, it’s primary use has been in the area of check sum validation, made popular with its use to verify the validity of important sequences such as credit card numbers. Currently, almost all credit card numbers issued today are generated and verified using the Luhn Algorithm or Modulus, Mod-10 Formula. Needless to say, if you come upon some existing credit card numbers that fail the Luhn algorithm when put to the test, it is safe to assume that they are not valid or genuine numbers.

The one thing to keep in mind is that validity in terms of passing the Luhn test only means that it is mathematically valid for computational compliance purposes. It does not guarantee that the credit card number sequence is indeed a working number that is backed up with a valid credit card account on the card issuer’s end. It is not unremarkable for one to artificially generate a mathematically valid credit card number that passes the Luhn validation check, but still ultimately fails as a fake credit card number with no actual substance. The Luhn algorithm only validates the 15-16 digit credit card number and not the other critical components of a genuine working credit card account such as the expiration date and the commonly used Card Verification Value (CVV) and Card Verification Code (CVC) numbers (used to prove physical possession of the debit or credit card).

The Nerdy Process Of Applying The Luhn Algorithm To The Creation and Validation Of Credit Card Number Sequences

For those who hate math or get scared when they encounter a bunch of scary looking mathematical formulas and numerically inspired descriptions, you are not alone. I personally hate math as an academic subject and was rather terrible at it back in high school and college, but if you like visual, thinking puzzles like Sudoku, you’ll like working with the Luhn Algorithm. It’s pretty clever and remarkably well put together. It’s also pretty easy to explain.

1. First, you’ll need to lay out all 15 or 16 numerical digits of the credit or debit card number. The Luhn Algorithm always starts from right to left, beginning with the rightmost digit on the credit card face (the check digit). Starting with the check digit and moving left, double the value of every alternate digit. Non-doubled digits will remain the same. Remember that the check digit is never doubled. For example, if the credit card is a 16 digit Visa card, the check digit would be the rightmost 16th digit. Thus you would double the value of the 15th, 13th, 11th, 9th digits, and so on until all odd digits have been doubled. The even digits would be left the same.
2. For any digit that becomes a two digit number of 10 or more when doubled, add the two digits together. For example, the digit 5 when doubled will become 10, which turns into a 1 (when 1 and 0 are added together). Likewise, the digit 9 when doubled will become 18, which becomes 9 (as 1 and 8 are added together). Obviously, 0 when doubled will remain 0.
3. Now, lay out the new sequence of numbers. The new doubled digits will replace the old digits. Non-doubled digits will remain the same. Thus, you should be able to come up with a new sequence of 15 or 16 numerical digits depending on card type.
4. Add up the new sequence of numbers together to get a sum total. If the combined tally is perfectly divisible by ten (ends in 0, like 60 for example), then the account number is mathematically valid according to the Luhn formula. If not, the credit card number provided is not valid and thus fake or improperly generated.

An Example Of the Luhn Validation Technique In Action - Using Homemade Graphics

For the visual types like myself, let’s use the American Express credit card on the right to better demonstrate the doubling and addition mathematics of the Luhn Algorithm. Follow the numbers and you’ll realize that it’s not as difficult as it may first appear. It’s actually very easy once you get the hang of it. You won’t look at credit card numbers the same way ever again after you get a good grip of it - I assure you. You’ll find yourself testing credit card numbers for fun!

Ignoring the obvious Amex logo on the card, right of the bat it’s clear the account number is that of an American Express number - denoted by the numerical prefix - “37″. Now let’s crunch the numbers through the Luhn Algorithm using the following displayed Amex credit card number: 3759-876543-21001. It doesn’t matter if the credit card number sequence has 15 numbers like the American Express or 16 numbers like Visa, MasterCard, or Discover, the Luhn validation check should be able to verify whether this card number is a mathematically authentic credit card number regardless. Follow the Luhn steps from #1 to #4 below, starting with the rightmost check digit.

In this case, the total calculated sum was 57, which is not divisible by 10 (the added up sum does not end with zero). Thus the number fails the Luhn Algorithm validation check. According to the Luhn test, this particular Amex credit card number is completely bogus and fake. The numbers were likely randomly slapped together. To make this particular set of numbers Luhn compliant and error free, all we would have to do is change the all important “check digit” number from 1 to a 4, which would result in a total sum of 60, thereby becoming Luhn compliant.

If you want to test this mathematical theory out in real life, I recommend pulling out your own credit cards and spending a few seconds to run a quick Luhn screening on them just for your own amusement and education. Pretty neat isn’t it? If you want another credit card number to test on, try using the credit card number that is displayed on the cartoon “VIZA Card” [sic] that Bart Simpson is holding up in the graphic at the top right of this article - the card is in the name of “Rod Flanders”, and the credit card number is: 8525-4941-2525-4158. Tip: Just by looking at the prefix numbers you probably should already be able to tell that the account number’s completely random and fake.

Use The Luhn Formula To Validate Existing Accounts But Don’t Attempt To Create and Use Fake Credit Card Numbers

Now with this new found knowledge, keep in mind you still won’t be able to randomly generate genuine workable credit card numbers. The Luhn theory only allows you to generate mathematically compliant credit card test numbers, not hack workable ones. Besides, without valid expiration dates, and valid CVV2, CVC2, or CID numbers (the special security codes printed on the back or front of credit cards as additional authentication measures), you still wouldn’t be able to legitimately use your self generated numbers to run credit transactions anyway.

Cracking and hacking the security codes found on credit cards is currently impossible. To calculate a workable 3 digit CVV2 security code, the algorithm requires a primary account number (PAN), the 4 digit expiration date, a special 3 digit service code, and a pair of DES keys. With such heavy encryption and billions to trillions of numerical possibilities, unless you have God-like mental processing power and a fleet of super computers at your disposal, you won’t be able to use brute force guessing attempts to crack the codes.

While it’s good to use this type of information to education yourself on the inner workings of credit cards and mathematical validation theory, it’s best to stay away from trying to further crack the secret of credit card codes to come up with free workable account numbers. Don’t use the Luhn Algorithm for anything else but personal entertainment and amusement.  Please don’t go around trying to generate a list of fake credit card numbers on your own and trying to buy stuff with them. I know some of you out there may be tempted to try, but you’ll just get yourself in trouble.