A recent study done by Moebs Services highlighted that average bank overdraft fees have remained the same ($25) over the last year, despite tighter regulations from the Federal Reserve. So, how does this compare to other forms of short-term credit? Here is what the firm’s CEO, Mike Moebs, had to say about the impact that such high fees could have on the short-term credit market:
Payday lenders can provide a good alternative source. The small loan market… is driven by people who don’t have FICO scores high enough for a credit card.
In his analysis of the report, Main Street’s Matt Brownell concluded that…
If you need a small loan to get you to payday and you’re confident you can pay it off in time, a payday loan beats bouncing a check if you can pay the loan quickly. Just be careful.