Finally, a fair and balanced story. Hats off to the Today Show

Visit for breaking news, world news, and news about the economy

If you haven’t seen it already, the Today Show aired a short segment on the industry highlighting two customer experiences with our product. Finally—a story that offers the perspective of a borrower who said “for me, it works well.” And that’s exactly why products like ours are one of many options to consumers.

There was a bit about credit card cash advances and overdraft being “cheaper” than payday advances. But, are they?

A report by the FDIC concluded that bank and credit union overdraft fees carry APRs ranging from 1,067 to 3,520 percent. In addition, a recent Pew Center study concluded that if an overdraft was treated like a short-term loan with a repayment period of seven days, the APR for a typical incidence would be well over 5,000 percent.

Also, a Federal Reserve Bank of New York staff report, “Price-Increasing Competition: The Curious Case of Overdraft versus Deferred Deposit Credit” finds that that deferred deposit credit, payday loans, and overdraft protection compete directly for market share in the short-term credit market, an $80 billion dollar market.  The report found that payday advances are a cheaper alternative to cover small-denominations and “when deferred deposit credit [payday loan] priced per dollar borrowed is available, depositors prone to small overdrafts switch to that option.”

Wonder if the Today Show got their hands on these studies?

  • Digg
  • Facebook
  • Mixx
  • Google Bookmarks
  • StumbleUpon
  • NewsVine
  • Reddit
  • RSS
  • Tumblr

2 Responses to “Finally, a fair and balanced story. Hats off to the Today Show”

  1. cv says:

    I believe that what Jean Chatsky actually said was that the overdraft protection offered by your bank was cheaper than a payday loan – not that overdraft charges themselves were cheaper. Makes a difference.

  2. Jon Schultz says:

    Not only can overdraft protection be more expensive than a payday advance, she was also mistaken in thinking that the APR of a payday loan is tremendously important. The importance of a loan’s APR is directly proportional to the term of the loan, which is to say the APR of a 30-year home loan is 780 times more important, for a consumer, than the APR of a two-week payday advance – simply because the loan is in effect for that much more time. Even if a payday advance is rolled over 4 times and you consider it to be a 10-week loan (which it isn’t because the lender incurs more costs with every rollover) the APR is still only 1/156th as important as the APR of a 30-year home loan [(30 x 52) / 10]. This is the big mistake which all of the critics are making, and why usury interest rate caps are invariably counterproductive.


    Leave a Reply





    1PLs Company - Payday loans online and nearby Apply for $1,000, $5,000 or $35,000 cash advance