Rent-to-own business is booming
December 26, 2008 | alternatives, industry, media coverage | Comments (0)At least according to this story out of New Jersey:
A tough economy is good for the rent-to-own industry. This recession, in which credit has dried up at all levels, is better still.
People unable to get credit cards, bank financing or any other kind of loan can lease appliances and furniture from rent-to-own stores and own the merchandise at the end of the lease.
The industry added 300,000 customers in 2007, according to the Association of Progressive Rental Organizations.
Business not booming
December 26, 2008 | Indiana, customers, employees, industry, media coverage | Comments (0)At least for payday lenders in Fort Wayne, Indiana. From the story:
The survey shows that more payday owners are reporting a decline in business this year, with about three times as many reporting a decline in December as reported an increase in lending.
Bill Smith, who owns Easy Money stores, said customers who turn to payday lenders are like everyone else this year and are cutting back.
That means using available funds for holiday purchases and not borrowing.
“Our customers are trying to do a cash Christmas this year,” he said.
This contradicts a lot of supposition in the media that the payday lending business is booming.
We couldn’t resist
December 25, 2008 | industry, media coverage, personal finance | Comments (0)So here’s one post on Christmas Day. From today’s Washington Examiner a guest piece by James Bower of the Center for Economic and Entrepreneurial Literacy:
Simple fees get translated into confusing annual percentage rates. A short-term payday loan doesn’t sound like a good solution when described as a 391% APR. But analyzed the same way, it’s a better idea than bouncing a check where common bank overdraft fees can be as much as 4,954% APR. (Actually, in both cases, the percentage fees are not accurate ways to describe the cost).
A classic
December 24, 2008 | Uncategorized | Comments (0)We’ll end today’s blogging with Bing singing the greatest Christmas song of all time.
Good will to all…
December 24, 2008 | Uncategorized | Comments (0)Friends: The Payday Pundit wishes you a Merry Christmas. Even to our critics and site pests.
We’ll be lightly posting today and probably not posting tomorrow (if we can resist).
Good works by a payday lender
December 24, 2008 | industry | Comments (0)The charitable contributions and other good works by payday lenders often goes unnoticed so the Payday Pundit thought he’d publicize one company’s efforts. Check ‘n Go, an Ohio-based payday lender, is partnering with the National Center for Missing and Exploited Children. From the news release:
Check ‘n Go is NCMEC National Photo Partner, redistributing pictures of missing children in more than 1,300 payday loan retail locations throughout the country. Images are divided across stores in 13 regions established by Check ‘n Go and NCMEC. Four or more color photos of a missing child from the geographic region are posted in each store and updated bi-monthly. Cumulatively, Check ‘n Go features at least 600 photos of missing children each year.
To assist NCMEC in educating parents, Check ‘n Go distributes Safety Checks for Children Tip Cards throughout the year. The cards include year-round and holiday-specific tips on how to keep children safer, and what to watch out for.
Most of the payday loan companies the Payday Pundit is familiar with are equally civic minded.
…”homemakers, firefighters and teachers…”
December 24, 2008 | California, Center for Responsible Lending, Consumer Federation of America, LA Times, customers, employees, industry, industry critics, media coverage, positive media coverage | Comments (0)Those are the payday lending customers discussed in this this four-page story in the Los Angeles Times headlined: “More in middle class using payday lenders”:
With tidy lobbies that resemble bank branches, many outlets are in shopping centers anchored by Wal-Marts, grocery stores or other big retailers. Lenders say their typical customers include homemakers, firefighters and teachers, whose steady jobs qualify them for loans.
Yes, the typical customer is the typical American.
Here’s the side bar to the article: “How payday loans work.”
Short of cash to fix her ailing BMW this year, Lunetta Blanks could have paid the bill with plastic. Instead, the federal investigator opted for a payday loan, shelling out $300 to pay off a $255 loan from the Advance America branch in her Silver Lake neighborhood.
U.S. consumers take on more debt
December 23, 2008 | Reuters, alternatives, industry, personal finance | Comments (0)Consumers are missing payments on mortgages, credit cards, and auto loans, Adams said, adding that Americans may be growing more reluctant to take on new debt and more willing to save.
Economists have long warned that U.S. households were taking on unsustainable levels of debt, pushing the savings rate near zero. But although increasing savings and reducing debt can contribute to consumers’ financial health, if Americans further tighten their purse strings now it could worsen the recession.
Prepaid cards better than paychecks?
December 23, 2008 | alternatives, industry, media coverage, personal finance | Comments (0)Interesting story on Marketwatch:
Prepaid cards may be cheaper than check-cashing stores and some banks, providers say, and may reduce payroll costs to employers.
Prepaid cards are for the unbanked. The Payday Pundit likes this trend because a lot of construction workers who get paid in cash are prey for robbers.
Comment of the Day
December 23, 2008 | Uncategorized | Comments (2)Any loan can trap people who can’t afford to pay it back in a cycle of debt, Arthur, just as any sale of wine can trap people in a cycle of alcoholism and any sale of desserts can trap people in a cycle of obesity. Nevertheless most people learn to use these things responsibly, if not at the beginning then at least over time as they get bad results from irresponsible use.
There are a million things that people who want to advance their careers or fancy themselves as muckrakers can call for increased regulation on, but apart from situations where products and services are advertised or presented in a dishonest way the fact is we are much better off with freedom of commerce than with more and more laws passed by politicians whose wisdom and honesty are not always matched by their zeal to control.
If you want to help those who get caught in a cycle of debt with payday loans then lobby the government to offer them assistance and do it without criticizing payday lenders, who happen to offer an honest service which has saved many people from terrible jams and which many more utilize to good effect. When people criticize payday lending – by distorting the meaning of the APR and focusing solely on those who misuse the product – it simply means they are looking for someone to step on so they can toot their own horn.
