Every month for about three years, Nina McCarthy followed the same routine after payday. She’d go into a Check Into Cash near her home in the Richmond area, and pay off an open-end loan for $700 or $800 ”“ and then she’d take out a new one for the same amount, never accumulating interest in the process.
Then McCarthy’s overtime hours at work were cut. With rent, a car payment and a 3-year-old granddaughter to feed, McCarthy didn’t have $700 for Check Into Cash. McCarthy made a partial payment, but interest piled up rapidly, at a rate she recalls was 24.9 percent a month, or a nearly 300 percent annualized rate.
McCarthy estimated that she paid more than $1,100 on the bill in the first three-quarters of 2014, including payments that Check Into Cash began collecting directly out of her bank account. Then in September, she had a stroke. She closed her bank account and hasn’t made any payments since. When she went back to the Check Into Cash store on Friday, an employee directed her to the collection line that has taken over her account. McCarthy was told she still owes nearly $650 on the line of credit and doesn’t know when she’ll be able to pay it off.