There are many consumer advocate groups that have come down hard on payday loans in the past. Citing their fees, terms and conditions, these groups argue that these types of loans take advantage of consumers.
Points to Consider about Payday Loans
But have these consumer advocate groups considered the impact that credit card and bank fees have had on consumers? And have they considered that the fees charged by credit card companies and bank often far exceed the fees charged by payday lenders? Finally, have these consumer advocate groups considered that, for many Americans, these loans are often their only source for quick cash in a financial emergency?
Payday loans have received a bad reputation over the years, but it has not been warranted. Payday loans often have high interest rates; no one can argue that. However, what is quite interesting is that the interest rates charged for this type of loan often pale in comparison to interest rates charged by banks for overdraft fees and bounced checks.
In fact, it seems that the banks have slid past the consumer advocate groups that have been condemning payday loans. Many studies performed on banks and their fees found that banks charged far more in interest and fees than payday loans.
Credit Cards and their Outrageous Fees
Credit cards are another prime example of exorbitant fees - and no one taking notice. For many Americans, exceeding their credit limit can cost them big, and paying late can cost them even more. Combine that with the fact that many credit card companies began raising interest rates on consumers who were unable to pay their bills on time. Of course, this rise in interest rates just compounded the already unmanageable debt and sent many consumers into a financial downward spiral.
Now that the new legislation has gone into effect, many consumers think that they will be protected fully from the charges imposed by these companies. But what they fail to realize is that credit card companies are famous for finding loopholes and getting their money. What Congress failed to realize was that credit card legislation will likely lead to higher interest rates across the board, even for individuals with gleaming credit histories.
Where Can we Turn for Quick Cash?
Where does that leave many Americans? They certainly don't want to deal with the tricky terms and conditions of a credit card, and they certainly want to avoid bank fees at all costs, but when money is tight and their paycheck is still days - or weeks - away, where do they turn?
Payday loans are an excellent alternative to costly credit card and bank fees, and for many Americans, they prevent them from losing even more money due to late fees and rent evictions, just to name a few.
Payday loans, regardless of the bad reputation they have received through many consumer advocate groups, have provided a useful service for many Americans that cannot - or choose not - to deal with credit cards and bank overdraft and bounced check fees. They are a financial solution that serves a very useful purpose in today's society.
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