Perhaps FINANCIAL RESPONSIBILITY should be a REQUIRED course in school so that people can be more informed. There are many people out there that think a check deposited is immediately available, not aware of daily interest charges on credit cards, I could go on with other examples.

I am amused and quite frankly completely dismayed by your ability to see your “rainy day fund” idea is not a cure all for everyone! For cripes sake, are you aware that many people live paycheck to paycheck… they can’t afford to even put a few dollars away.
Yes, that’s unfortunate and sad and exactly where we are as a nation right now. A PD loan may be the only answer for them to get their car fixed or get the medicine their child needs. How dare anyone restrict them from being able to do so!!

Also those that can and do have a little savings, may still choose to use a payday loan as opposed to digging into their savings. Again, that is their right and their choice.

Bottom line– don’t tell me how to manage my money, where and when I can spend it and what I can purchase with it. Last time I checked, financial freedom was a cornerstone of the US!!

And your statistic about 97 percent paying back on time?

Why, if they had 97 percent pay back on time, do they list the provision for doubtful accounts as a percent of total revenues for the year ended December 31, 2008 as 20.1%?

Am I misinterpreting the term “doubtful accounts”? They do sell those to other collection agencies who probably go after them and their credit ratings.

For the quarter ended December 31, 2008, the provision for doubtful accounts as a percentage of total revenues was listed at a whopping 24.4% compared to 23.4% for the same period in 2007. The rise must be because of the economic conditions out there now. Rose a whole percentage point!!

Looks to me like your statistics as well as your argument against the goodness of your business are a little slanted. It does seem to be a money making business.

Next payday, instead of going out spending like you’re rewarding yourself (like the masses you see at Walmart on Friday or Saturday) stack your bills that have to be paid and add them up.

Make a short list of what you absolutely have to have - they are called necessities, like food. Try and make it just one payday spending your money only on absolute necessities. Use up food at home, in cupboards, the freezer, pack your lunch.

Just see for one week, if you can hang on to a certain amount of cash. Start small, even 20 bucks…but it’s more interesting to try, say $100. Put it in an envelope, in a lock box, somewhere rather inaccessible, but at hand. If you need it, it’s there. By watching carefully, you’ll probably make it through the week with that bit of money set aside.

Do the same thing the next week, you’ll be two weeks up on your rainy day fund. With a little practice, you’ll find you rather enjoy not always handing out every bit of cash you have. It relieves a lot of stress in your life actually.

If you can’t keep a checkbook straight, quit writing checks for everything. Only put the amount of money in your checking account for that stack of bills and a cushion above that so you never overdraw. Pay for your groceries in cash, gas in cash. Saves time and makes you really think about the amount you are spending.

After even a few weeks of trying, you’ll have an amount of emergency cash that you can use as your own payday loan account. Although, after seeing that you don’t have to spend every dime you make, you may find yourself needing to borrow out of your fund less often. Watching your money doesn’t mean you are a skinflint, means you are smart.

If you’re a grown-up, seems like you could see your way clear to living within your means. Spend less than you make. Save money so you have your own rainy day fund to fall back on should the need arise. This often seems to be an outdated notion. According to the demise our economic system finds itself in, even college educated knuckleheads can’t figure it out.

Take a minute before you blast me too hard and have your family watch a short video available for free on the internet called “The Story of Stuff”. It may make you look a little differently at how we spend our money.

Pay on time payments, buy a new car just cuz, keep up with Joneses, treat yourself by indulging in something unnecessary…seems to be the way of society. From drug dealers, to politicians, to banks, to rent-to-own sharks, and to even payday loans…I guess making money off those who can’t manage life must be okay. Have at em I guess.

I find it interesting that you form an opinion of payday loans without ever having used one. Do you often make judgments of others without knowing anything about them?

Let’s examine your post and see how it holds up to scrutiny.

If you understood how a payday loan works, then you would know it is a two-week loan. So it costs $9 for a $60 loan. If you paid attention to the article, it is quite clear that 94% of borrowers pay back on time.

94% pay back on time. Are you with me?

So 6% do not. In other words, 6% do not honor an obligation they made. They went to a lender because nobody else would help them. The lender obliged. He said, “Please come back in two weeks to pay off your loan”.

These people did not hold up their end of the bargain. In some cases, they do take out another loan, usually from a lender who doesn’t bother to check if that person has a loan out. That’s bad business, to be sure.

But that person has another option: go to their lender and set up a payment plan. All members of CFSA are required to follow the association’s Best Practices, which include offering a payment plan for people who cannot pay it off.

Your “drug dealer” analogy sounds like it makes sense on the surface, but let’s examine it. Drug dealers offer a product that is illegal, has no useful benefit for its user, creates direct harm to the user, creates a problem for state and local law enforcement, and has damaging societal impacts.

A payday loan is legal in all states where it is offered, benefits the customer by providing them with credit where they could not get it (usually for emergencies), creates a direct benefit to the customer, does not create any problem for state or local law enforcement (complaints from customers are less than .01% of transactions), and helps society by giving these people a choice that doesn’t require them to go to a loan shark.

Now, do you see why your analogy is faulty?

I wouldn’t expect you to see logic or reason, because your post is filled with prejudice towards a business you have never used, and have no experience with.

And, of course, you completely ignore the issue at hand — which all opponents do:

Overdraft fees are SIX TIMES more expensive.

So, Sheller, please tell us what solution you propose to help those who need short term credit?

I don’t expect a response. Generally, when confronted with the facts, the ideologue runs away. I think you would do well to open your mind a bit. Have a read:

http://www.bloggernews.net/116580

“You charge $9 for someone to borrow 60 dollars? Now is that for a week, a month, a year?” Are you kidding? Do you understand the basic principle of a PD loan at all?

“This doesn’t effect me, as I make a decent living and make sure I have money in the bank, but others? Times are hard for those who make less. And there are skunks out there just waiting to make money off them. Not very honest way to make a living in my opinion”.

Many people use PD loans– all walks of life. Hmmm, I bet it’d surprise you how many teachers, lawyers, construction workers, police officers, etc use PD loans and how many people you know that do. But really why is it any of your business? And while its admirable you have $$ in the bank, not everyone has the same luxury. And yes in today’s economy it is a LUXURY.

Please do us all a favor and educate yourself about the Payday Industry before you spew misinformed garbage.

As for payday lending in general, here are some facts from the FDIC about how much you paying for that “free” checking account at your bank or credit union:

Average In States without payday loans: $541.65
Average In States with payday loans: $240.79

Those “free” checking accounts sound a lot like a treadmill to me. What kind of state do you want to live in? One where every consumer pays more in bank fees ($300+ more!) per year, or one in which people can choose the lower cost alternative and take out a payday loan when they choose?

I choose the payday lending state.

Payday lenders are micro lenders, loaning very small amounts for short, short periods, ie 14 days. An intelligent approach to see if they charge to much is to see if they make to much.

Advance America, (AEA) just released their earning for 2008 of $38.5 million. They have 2797 locations which is $13,765 per location per year! Pretty modest! That means the earn $1,147 per month per location. If you look weekly divide that by 4.33 weeks in a month and you get $265 per week per location…WOW again! They are open 10am to 6pm and saturdays 10am to 3pm or 45 hours. That comes to $5.88 an hour or 12% less than minimum wage!

Wow wow wow. Yet people who can’t do math call them predatory and loan sharks and not legitimate, etc, etc.

I kinda see the payday lenders point. It would be hard to “feel pedatory” when you working for the sub minimum page! And now we all get pissed when they say they can’t charge any less.

If they can’t pay, I would imagine your fees rise considerably, sort of like Bank of America, eh? Well, actually you may be more honest than B of A, who I am told have a new method when a person bounces a check, they run it through everyday, racking up the $35 or $40 overdraw fee until the person makes a deposit. Now they don’t actually return the check, the keep it and make that $35 a day even if it’s a week, two weeks. Heck, that’s pure gravy for them. This is the same company inline for bailout money because they can’t handle their money. Sort of weird turn of events isn’t it.

This doesn’t effect me, as I make a decent living and make sure I have money in the bank, but others? Times are hard for those who make less. And there are skunks out there just waiting to make money off them. Not very honest way to make a living in my opinion.

One B of A customer, a young woman making a little more than minimum wage cashed her $400 paycheck, not realizing she had a check bounce, as they hadn’t informed her. Once big old bailout taker Bank of America had run that check through until out of her $400 she received $70 back. That was $70 to pay all her bills, food, gas until her next payday. I suppose that’s where your business picks up. You take up the slack or bottom feed off the dredges left by banks like that and credit card companies who have enticed people with slick advertising and small print, raising their interest rates and penalties until people pay thousands for the gift of credit. Did the people know better? Maybe, maybe not.

Now your business, check-cash-do-gooders for the poor, I’ve heard a person can take out a $60 note, and end up owing hundreds or thousands of dollars. I guess you sleep better knowing “They chose to take it out, we tell them upfront what the deal is.” I bet it’s a little like a treadmill that’s hard to get off. Sort of a cycle, with you there to help them out at your kindly high rates.

You know, almost sounds like the tale that drug dealers tell when they justify their business. How does that go? “We just provide a service to people that want that service. If they don’t get it from me they’ll go to someone else. That’s capitalism.”

You have $8000 a month overhead? Feel real sorry for you. You have self-hypnotized yourself into believing you actually run a legitimate business. Only difference between you and a loan shark? That $8000 overhead and an honest moral compass.

You can fool yourself, but that’s about all. Maybe you could get a repo job when they shut you down, probably give you the same good feeling inside that you apparently get now. Lower overhead and you get to work outdoors.