The July 29 article which appears on and the Wall Street Journal, “Steer Clear of Payday Loans” by Jennifer Waters, is yet another example of misrepresentations and poor research by an uneducated consumer writer regarding a useful credit product.

What few consumer writers and advocates ever want to admit is that users of the product know exactly what they are doing, have compared the costs of comparable credit products, and the “cycle of debt” occurs in rare instances when an irresponsible borrower meets an irresponsible lender.

Payday loans have been in existence for over twenty years in this country. Twelve million Americans use the product annually. It’s time to give these consumers and their lenders the credit they are due. Ms. Waters didn’t even educate herself on the basics.

With regards to other credit options, I’ve been over this time and time again, yet Ms. Waters really insists on insulting both borrowers and lenders, so I’ll have to address her article. She posits “five things to consider before using payday loans”.

1) “Do you really need it?”

No kidding, Ms. Waters. Don’t you think people assess that question before they use this product? Don’t you think they consider other alternatives before selecting this option? The very fact that the Pew study said that if payday loans weren’t available that 80% of respondents would be more frugal proves that users do not in fact need the product. They are merely choosing to use it. So what’s the big deal here? People don’t need alcohol, cigarettes, cars, telephones, televisions, fast food, or Ms. Waters’ columns. They choose them. Only nanny statists believe we should control people’s lives by limiting their choices. And why does the media always harp on this particular product and not others which are far worse when used irresponsibly, like alcohol? If anything, this silly argument makes the case for payday loans.

The legendary economic Milton Friedman’s seminal book sums it up in its title: Free to Choose. When left alone, he said, people are perfectly capable of making the decision that is best for themselves.

2) ‘They take longer to pay off then you think”

No, this is the typical false extrapolation of data that all payday loan opponents make. Ms. Waters takes Pew’s data which says the average borrower uses the loans eight times a year, and assumes they are renewed back to back, over and over again. That’s not what Pew says, nor is it consistent with the non-rollover policy even Ms. Waters acknowledges governs the loans in most states.

And so what if borrower takes out eight loans per year? They made a choice to do so. They recognize the need for short-term credit, and recognize that the product is right for them. If they felt it wasn’t worth the fee, they would not return to use it again. This all supports a 2009 survey from George Washington University that demonstrated a 90% satisfaction rate with the product.

And I ask yet again – why this product and not others that have been long proven to actually cause demonstrable physical harm?

3) “There are other options”

Ms. Waters demonstrates an elitist attitude, suggesting that borrowers are not only stupid, but are repeatedly stupid by choosing this product. Yes, there are indeed other options. What makes Ms. Waters think that borrowers haven’t considered them? I wonder if she realizes that borrowers may not want to pawn a precious item, or borrow from a friend and risk damaging the relationship, or paying reconnect or late fees, or bouncing checks? I’m guessing not.

4) “They can ruin your credit score”

This is where I realized Ms. Waters has never used a payday loan, and literally has no clue what she is writing about. Payday lenders don’t report to credit agencies and the credit agencies don’t accept reports from them!

5) Payday lenders depend on your bad financial patterns.

A lot of things depend on my bad patterns. Let’s see – eating fast food depends on my poor eating habits or time management. Using an ATM at a bank other than my own will result in me getting charged fees. That nasty bank is taking advantage of my laziness! Gambling in Las Vegas depends on my weakness for having fun throwing dice! All of these should be put out of business Worst of all, developing a bad opinion of payday loans depends on my stupidity for believing that Ms. Waters understands short-term credit.

Ms. Waters strikes me as another uneducated writer who fails to understand what she’s actually rendering an opinion on. Even worse, she appears to be an elitist who thinks that the choices people make for themselves are wrong because she says they are wrong, and that government can save people from themselves!

No thanks.

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