Well, once again, Steve Straughter at Examiner.com displays his ignorance regading payday loans and must be corrected. First, however, let me be clear: payday loans are not for everyone. When someone is faced with a financial shortfall, they should consider all available options and their associated risks. PDLs are neither the least nor most expensive short-term credit option.

Straughter tries to point out other options, which is fine. His mistake is that he insists people avoid payday loans, no matter what. Of course, the options he presents aren’t necessarily options for many people. After all, 154 million PDL transactions were undertaken in 2008. Americans aren’t stupid, Steve. They shop around for the best deal, and that means taking non-financial considerations into account also.

Let’s examine Straughter’s “alternatives”:

“Ask a family member – this costs nothing more than some pride and they will be a reliable source in the future should this rare occurrence happen again. Just remember that if you do not pay them back then it is a relationship at stake, not just excessive fees.”

Well, Steve, a lot of people apparently put a high cost on pride — a cost higher than a payday loan. Furthermore, who is to say a family member will be a reliable source for future loans? They are, in fact, more likely to get annoyed with their relative constantly asking them for money. Many families need multiple short-term bridges each year. And, as you say, a relationship is at stake — whether you pay them back or not. Perhaps you’ve read Shakespeare, who had something to say on this matter: “Neither a borrower nor a lender be, for a loan oft loses both itself and friend”.

How high a cost do people put on this option? High enough that they chose payday loans 154 million times last year over this option.

“Go to your employer and ask them if they could advance you next weeks paycheck or a portion of it. This carries no fees and many employers will do what they can to help you, albeit you will be without a paycheck in the coming weeks, there is no charge for using your own money.”

I’d like to know what studies Steve the self-proclaimed “scientist” can cite showing that “many employers will do what they can to help you”. Let’s remember that, again, some people may need several advances in a year and you can bet these employers are going to be annoyed by multiple requests. And once word gets out that free advances are being made, how long before the employer ceases to make these loans because of the demand on his pocketbook?

How high a cost do people put on this option? High enough that they chose payday loans 154 million times last year over this option.

“Ask your church for help – many churches have programs set up to consider members that have given their tithe regularly. There are no fees associated with this goodwill typically.”

What if you don’t belong to a church? What if you don’t tithe regularly? How quickly will this charity come through? Fast enough to meet the person’s needs? Considering that PDLs get money into consumer’s hands in 30 minutes or less, I’m betting a church will be quite a bit slower and, again, there is the issue of needing money more than once.

How high a cost do people put on this option? High enough that they chose payday loans 154 million times last year over this option.

“Ask your employer to work overtime or do a special project! This is not only noble, but may set you up for a raise in the future.”

Certainly a good idea. But again, if you need the money NOW, there may be several days wait before you get paid that overtime. Furthermore, that overtime takes people away from their family. What you gain in short-term pay you lose in family.

How high a cost do people put on this option? High enough that they chose payday loans 154 million times last year over this option.

” Pawn or sell things that you do not use or need; yes you will be taking a loss on your prior purchase, but if you do not use it what good is it to you anyway.”

What if you don’t have anything you want to pawn? What if you don’t want to risk not being able to buy back something of precious or sentimental value?

How high a cost do people put on this option? High enough that they chose payday loans 154 million times last year over this option.

“Join a credit union and in times of need you can borrow money from them if you have contributed regularly. They do charge interest just the same, but when you repay the loan it helps your credit.”

Apparently, Straughter doesn’t realize that not everyone is eligible to join a credit union. Furthermore, credit unions are not the altruistic entities they hold themselves out to be. They make all their net income on overdraft fees, just like the banks do.

How high a cost do people put on this option? High enough that they chose payday loans 154 million times last year over this option.

“Consider getting a second job”

No kidding. Doesn’t solve the immediate problem of needing a loan NOW.

” Cut out conveniences”

No kidding. Doesn’t solve the immediate problem of needing a loan NOW.

” Ask your bank for a payday advance – Banks will typically do this for direct deposit customers, but be careful that you use this only in an emergency because those fees overtime can definitely add up”

Now that’s rich! Is Straughter even listening to himself? Here he is telling people to stay away from payday loans at all costs….then telling them to go to a bank for a….payday loan. HUH????

Much as I admire a blogger suggesting how to save money and build a financial emergency fund, the simple truth is that it’s a difficult thing to accomplish when you’re living paycheck to paycheck….especially in this economy.

Payday loans are an option. They are not for everyone, but if Straughter has his way and PDLs were to be banned, people would be forced to the one alternative Straughter doesn’t mention — bouncing checks, which cost three times more than a payday loan.

The internet can be a great thing, except when every moron with a keyboard thinks that makes him an expert.

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