Stunningly balanced column
February 27, 2010 | Colorado, industry, positive media coverage | Comments (0)Hats off to Vincent Carroll at the Denver Post:
Still, what’s the alternative for these serial borrowers, and for the many others who use payday loans as an occasional cushion against an unexpected expense or to pay a bill that can no longer be ignored? These people have jobs and checking accounts, otherwise they wouldn’t qualify for a payday loan. They’re not mentally incompetent. They make choices involving money all the time.
And they are far better aware of their actual options — excruciatingly aware, no doubt — than lawmakers or the average voter.
The Bell Policy Center, an ardent opponent of payday loans, lists what it considers options to payday loans in its 2008 report, “The Truth About Payday Loans.” They include “borrowing from family and friends,” “using a cash advance from a credit card,” “using overdrafts” and “receiving money from a charity or church.”
However, consumers also pay dearly for cash advances and overdrafts. According to a USA Today analysis last year, bank overdraft fees applied to two weeks of credit are equivalent, on average, to an APR of 696 percent — far higher than the APR for a payday loan.
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