Comments on: Pay Day Loans Have Equally Bad Financial Friends

By: dunwithpdl

dunwithpdl — Thu, 03 Apr 2008 04:28:10 +0000

Once you get into them, it is quicksand, no way to get out. We was in for over a year. We ended up at two places, for the maximum…here in Ohio it is $800.00. The only way we got out, was to let the checks bounce all over the place. It may have costs us $497.00 in bounced fees, but then we were done. It had previously been $450.00 EACH & EVERY MONTH while we tried to figure out how to get out. They won’t even consider letting you make 2 equal payments. Paid in full is all they will accept. I finally refused to pay, and let them bounce. We suffered, but now we are done! My only regret…..I didn’t do that 11 months ago. I figured it up, in that years time, we lost over $6,000. They are nothing more that legal loan sharks. I am extremely surprised no one ever went in and shot the place up.

By: aggressive saver

aggressive saver — Sun, 02 Mar 2008 01:20:28 +0000

you know, i don’t like them, but i heard a pretty decent commentary on them on npr, and one valid point is that they certainly serve a need. there are many, many people that fall back on payday loans at one point or another and it means the difference between having utilities cut off or not in some cases. i know there’s talk of making them illegal, but then other less savory lending folks — with much more severe interest rates and other measures — stand to gain a lot more business.

By: MoneyBlogga

MoneyBlogga — Sat, 01 Mar 2008 00:56:17 +0000

I have never had to take out a pay day loan but we have plenty of storefront outlets in town. I don’t see any of them closing down and so I am guessing that they do enough business to stick around. My feeling is that these places are no better than loan sharks.

By: Adam Williamson

Adam Williamson — Fri, 29 Feb 2008 20:18:41 +0000

I’ve little to no experience with Pay Day Loans (though they are illegal in MA) so other than going on what I hear they have almost no use. I say almost because they do have a use, to make a large profit for the lender.

I’ve had quite a bit of experience with Refund Anticipation Loans (RAL) and Refund Anticipation Checks (RAC). I was employed by H&R Block (and look foward to working for them again next season) for the first half of this tax season. I did my best to convice people to just wait for the checks to come in the mail. I would have had my contract extended till April 15th except that I sent to many of my clients to free file locations. Every single person I dealt with who got the RAL or an IRAL (higher fees, some money when you walk out, the rest as a RAL in 1-2 days) did so because they needed cash immediately. The other general impression was that they didn’t mind the fees because they felt it wasn’t their money they were spending (in some cases it wasn’t, but I’m not a fan of people who purposely work only long enough to max out their EIC). The proliferation of RAL’s is due to most people thinking of their tax refund as free money they are getting back from Uncle Sam instead of as an interest free loan to the government.

Bank Fees:

Stick with your local credit unions if possible, though their fees are going up, they don’t climb nearly as fast as fees at banks. As far as bank of america is concerned, I am a student doing field work so I can make use of their free student checking (with direct deposit, otherwise it’s $12/month) and free savings. If it wasn’t for my “reward’s” program with them (Keep the Change, and it is a decent program), I would swap all my finances over to one of the two credit unions I am a member of.

By: jane

jane — Fri, 29 Feb 2008 18:03:10 +0000

Oh yeah, bank account fees. I just opened up basic accounts at Bank of America b/c I am moving cross country and they have branches in both my home state and my new. I bank with USAA and am perfecally happy with them but with buying selling a home getting a certified check etc. I figured hey for a couple of months no big deal to get a simple account for convience. I am not going to switch my direct deposit, or keep a lot of money there or do any else of the like so I figured I be paying some account maintence (would qualify for the free account promotions) but it wouldn’t be all that much. Thank god they had a one year waiver promotion going on for the accounts, its something like $12 for checking $6 for savings a month. If I was cashing a work check in there and had little left over to save it’d be cheeper to use a cash checking place.

By: jim

jim — Fri, 29 Feb 2008 15:48:37 +0000

Well, unfortunately those cash advance places are one of the few places that people can go to get their checks cashed if they don’t have a bank account.

By: Frugal Dad

Frugal Dad — Fri, 29 Feb 2008 14:21:45 +0000

As far as I’m concerned these pay-day loan places should be made illegal. It’s really nothing more than predatory lending in person. Have you ever noticed that the worst zip codes have the most “cash-advance” shops?