Justin Hauke of the Show-Me Institute provided some interesting numbers yesterday on payday loans in Missouri. Hauke’s numbers highlight that despite triple-digit annual interest rates which people commonly cite, customers only pay a fraction of that in fees. What’s more:

Before readers are outraged at the interest rates being charged on such loans, it’s worth considering the annual interest charged on other consumer products. The perfect example is late fees on video rentals. For example, despite the fact that Blockbuster advertises a “no late fee” policy, the company in fact charges a $1.50 restocking fee for rentals more than eight days past due. If you consider an average rental cost of $5, this restocking fee would translate into a simple interest rate of 1,369 percent if expressed as an annual rate (assuming no compounding). But nobody accuses Blockbuster of being usurious.

Just some food for thought.