Other possibilities may cost a lot more than payday advances

Payday advances are claimed to carry too high a price for everyone to pay. The few alternatives, though, that exist to payday advances can be way more expensive. Making minimum payments on charge cards can be far more costly in the long run than any payday advance ever could be. A cash advance on credit from a bank could be the exact same way. The interest rate on a short term installment loan from a payday lender can be tiny compared to the interest on an overdraft fee. It also goes often unmentioned that banks and credit unions don't all offer a payday advance type product because they cannot afford to.

Low interest lending when compared with over-limit

Debit card programs will let individuals withdraw a lot more than is in a checking account or pay for things that cost a lot more than you have occasionally. Of course, even $1 over can often lead to a fee being charged to you. Over-limit fees for just $1 over can accumulate interest of 1,277,500 percent if you are getting a $35 over-limit fee and paying it off the next day. A common charge of $35 per overdraft is the fee assessed by Wells Fargo and Bank of America, two of the world's largest banking organizations. Payday cash advances have very low interest rate when being compared to these over-limit fees.

No practical option

A choice for payday advances is something banks and credit unions avoid. There is a reason for this. They cannot afford to. Victor Stango did a study that showed cash advance venders are easier to access than credit unions and also are able to afford to have low prices instead of credit unions which lose money off of things like this. Throughout the nation, payday advance other possibilities were only available at a few credit unions. In fact, only 6 percent of credit unions had this service. It is also hard for banks because of strict needs. You will find lots of them making it hard to change things. Most financial institutions won't give somebody with bad credit a loan.

Predators or innovators?

The thing about personal loan companies is that they went into a market where not a soul else would go. They also ended up doing it really well. This is the only reason they have their special name. This name is given as predatory lenders. Read more facts and statistics in the new payday lending industry report on Personal Cash Store.