Payday Cash Advance Providers: Hated by Those Who Don’t Use Their Services

Nov 14, 2017 by

Payday Cash Advance Providers: Hated by Those Who Don’t Use Their Services

By the standard definition, payday cash advance and related non-bank financial services are not very popular products. Three to five per cent of American consumers view non-bank financial services or lending as check cashing.

According to Americans for Financial Reform, that thought make those financial products unpopular among the average Americans. As per a recent data from Pew Charitable Trust, seventy per cent of Americans want to see non-banked consumer services and payday lending reformed and eighty per cent believe that they are very expensive.

So, most people hate payday lending and view check cashing as inherently predatory and suspicious.

However, there is one notable minority of American consumers who rather like these products – the ones who uses them. For this group of approximately ten to twenty million Americans, payday is quite popular.

Lisa Servon, Professor of City Planning at the University of Pennsylvania and former dean at The New School, noted that something did not make sense because if payday lending was so toxic and awful, then the number of people using these products would not be rapidly increasing.

Servon told PBS News Hour that she has spent twenty years working in low-income neighborhoods and she knew that people who do not have very much money are well aware of where every penny goes. That is when she thought that there has to be more to the story about the payday lending industry.

In her book, The Unbanking of America, she tried to tell a story – a story that she researched by working in various parts of the non-bank financial services industry including check cashing and payday lender shop.  She said that the reasons are neither hard to understand or illogical.

Consumers like payday lenders since they offer consistent transparency and consistent access to those who are living very close to the financial margin.

Accessibility and Access

When it comes to funds, consumers with savings do not think about immediacy as a driving concern. A check that goes to the bank and is not available for a few days does not seem like a life-and-death situation because the consumer presumably has funds in the account. However, that is not the financial reality for those consumers who use payday loan and check cashing services. Servon observed that this can be the cause why these financial products may seem odd to those outside of the unbanked experience.

Also, ATMs do not give $8 or $13. They give multiples of $20. Since the underbanked consumers need every dollar that they can get access to, everything suddenly makes so much more sense.

She further noted that these consumers require more than just funds in their hand. They also require funds to be distributed. The check cashers often act as a one-stop shop for multiple financial services, such as remittances to relatives overseas, pre-paid cards, paying rent or paying bills. Also, these services are available 24/7 as opposed to the 9 to 5 bankers hours.

Moreover, the payday lenders are fulfilling the basic needs of customers that are non-optional. Consumers pay their bills with payday loans, they do not purchase luxury items.

Servon said that people talk about getting rid of payday lenders without even realizing that their demand is there. Their demand is there because the wages have been decreasing since the ‘70s. since income volatility has doubled, it has become harder for people to predict how much money is going to come week to week. Even though the costs are high, isn’t it better to have access to expensive credit than not having access to any credit? She also urges people to realize that access to funds is expensive no matter where they turn – traditional or non-traditional.

Transparent transactions

Servon made an observation that even though the payday loans, wire transfers and check cashing are high, they are known commodity. People can find brightly colored, large signage all over the locations and customers are aware of exactly what they are paying to make use of funds.

Banks can also be just as expensive or maybe even more, but not in very obvious ways.

She says that the signage found in the bank teller windows resemble the ones that can be seen at a fast-food restaurant, such as McDonald’s. It says that it costs 2.03% the face value of your check to cash it, $1.50 to pay a bill, $0.89 for a money order.

She noted that with banks there is no immediate access to funds and checks can take a day or 2 to get cleared. In case other expenses hit an account during that window, the overdraft fees start at $35. 44% of the banks still stack charge to accounts to maximize the number of fee overdrafts that can be charged. Account service fees, ATM fees are charged if a minimum balance is not maintained. For marginal consumers, banks can prove quite expensive.

Payday cash advance providers are a boon for the millions of American consumers who are underbanked. Servon said that it is important that this industry remains so that millions of Americans have access to funds.

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How to know if you are prepared to open up a Rewards Credit Card

Mar 15, 2016 by

How to know if you are prepared to open up a Rewards Credit Card

Reward credit cards have been popular for some time now. But they have really gone off the charts over the course of the past few years. Nearly every credit card issuer boasts some kind of rewards program now. Some will offer you the chance to earn gift cards. Some will give you airline miles or credits at hotel chains. Some even offer to give you cold hard cash back for every dollar you spend on certain types of purchases. These are all great incentives. And a rewards credit card can certainly prove to be beneficial to many consumers. There really is nothing like earning perks back for doing something that you would be doing anyway – spending money!

Despite the perks, though, these types of cards are not right for all people. Many rewards cards charge higher interest rates when compared to similar cards with no rewards offers. Some cards even charge high annual fee charges that may prove to be more costly than any rewards that you actually earn. However, like we said, rewards cards can be, well, rewarding. It’s all about making sure that you are in the right place in your financial life prior to getting one. So how do you know if you are ready to upgrade to a rewards credit card? Here are some key signs that show you can move on from a basic credit card to the rewards card of your choice.

You Are Ready for a Rewards Card if:

You Have the Household Budget Well Under Control

It is a great thing to earn benefits while you charge your expenses. However, you should not sacrifice your budgeting efforts in an effort to earn more, more, more. In other words, don’t start spending on your card like crazy so you can simply earn more rewards. If you have the ability to create a household budget, stick to it and you manage to put a bit of money into your savings every month, there is a good chance that you might be a good candidate to get a rewards card and to use it responsibly.

You always pay off Credit Card Balances in Full

The rewards that you earn are only really good for you if you carry a zero balance on your card. That way, the miles or cash bonuses that you earn actually outweigh any interest that you accrue on your purchases. If you are one of those people who always makes it a point to only charge as much as you can reasonably afford to pay off in full every month, and you always pay off every dollar that you charge when your bill comes through, then you may find that a rewards card is a great tool to help you get a little cash back or to earn miles for your next vacation.

You Have a Good Credit Score

There are tons of rewards programs available these days. The best, however, are usually reserved for people with good credit scores. It is also worth noting that if you do have a high credit score, you are probably pretty responsible with your credit, which is another plus. Before you fill out any applications to get a rewards credit card, make sure that you pull your credit report/score to find out where you stand right now.

Finally, only get a rewards card that offers you perks you will actually use. If you don’t travel frequently or perhaps don’t enjoy flying, then a card that offers airline miles is probably not right for you. Spend a little time shopping around and comparing rewards credit cards to find the card that offers the types of rewards that you will enjoy racking up.

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Unusual Money Saving Tips

Jan 22, 2014 by

Unusual Money Saving Tips

Most likely you have heard various financial tips. Some of them you may have followed and some of them you may not have felt the need to do. No matter how you feel about financial tips, there are some that are unusual but really do work.

When you go out to eat you can see on the menu that some meals are larger than others. Most of the time the meal that are larger are not really much more expensive than the smaller meals are. Order the larger meal. You can take home the left overs and have another meal that did not cost any money because it had been paid for already.

Get your friends to cut your hair. Make a party of it. Getting your friends to cut your hair can save a lot of money over the course of a year. Think about how much you pay per haircut, is it worth it? Depending on what you want done to your hair and your friend’s skill level there is no reason they cannot do it for you.

Use dryer sheet two or three times. Dryer sheets are still good after their first use, do not throw them away. They can be used two to three times and still be effective. Reusing dryer sheets will help you to save money by not needing to buy more than necessary.

Saving Money

Saving Money (Photo credit: 401(K) 2013)

The day after Christmas there are so many sales and deals. You can find great gift baskets for next to nothing. There is nothing wrong with buying a lot of them and saving them for next year. You may even find that you can give them as gifts for other things throughout the year such as birthdays. This saves a lot of money, because the day after Christmas they are trying to get rid of all the items they have in stock for that year.

Do not buy rags at the store. When a towel or piece of clothing is worn out and no longer of use cut it up. You can use the scraps of clothing or towels instead of buying rags. This saves money and can give you many more rags than you would actually buy at the store and if one gets ruined you will not mind as much because it was not a new rag, it was an old piece of clothing.

There are many ways to save money. Some are more unusual than others. It does not matter if it is a way that most people use to save money or if it is a big more unusual. The point is to save where you can. You may surprise yourself by finding more ways to save than anyone you know, or a new way to save that no one else is doing.

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Achievable Financial Goals

Jan 10, 2014 by

Achievable Financial Goals

Most everyone has financial goals. Some are very reasonable and realistic, others, not so much. Setting financial goals that are achievable is just as important as the steps you take to get to those goals.

One of the first things you need to do is decide what you want those financial goals to be. You need to make priorities out of them. What do you want first? Second? You must keep in mind that they have to be realistic. You cannot say I want to save a million dollars this year? Well, okay, do you make enough money that you can realistically save a million? If you do fine, if not then obviously this is not a realistic goal. Making goals you want to achieve is just as important as setting realistic goals. You are more likely to achieve your goals if you want them.

Your goals should be able to be measured. It is easier to measure financial goals than many other goals. So give your goal a number. Being specific about timelines and measurements is very important to you actually achieving your goals.

Try for only one goal at a time. Do not try to split your focus right away. By setting only one goal to start with you can put most of your focus toward that. Once you reach that goal you will be able to set another one, and so on. By having one goal at a time you are more likely to actually get to that goal. If you set so many you cannot focus on them, then they will never be achievable.

Millenium goals Toon

Photo: Wikipedia

You do not need to only set one goal a year. If you set a goal for yourself and you achieve it go ahead and set another one, you do not need to wait until next year. Continue your goal setting and achieving all year long.

There may be many goals you want to achieve and are unsure of which one you want to achieve first. You always have the option to talk with a financial advisor. They will be able to help you prioritize your goals, talk to you about how best to achieve them, and then help you get started. They can we a wealth of information, so if you do go to see one, take a list of question you have so that you do not forget to ask anything.

Prioritize your goals; make your goals measurable; work on one goal at a time. These are the basic steps to get you on your path to achieving your financial goals. It may seem simple to some, and difficult to others. By only having one goal at a time you should not feel so overwhelmed and it should help make it easier to achieve all of your goals.

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You Cannot Plan For The Unexpected

Dec 31, 2013 by

You Cannot Plan For The Unexpected

Here’s the main thing you have to understand about life: as much as you think that you can plan for things, the unexpected is just around the corner. This is especially true when it comes to your fnances. While you may find that a few months of good fortune allows you to save money and have Financial Relief, you soon find that Unexpected emergencies occur that can lead you back to a situation where you don’t have the money to pay for your monthly bills. It doesn’t matter how financially responsible you may be, these unexpected issues can throw you for a loop. Even if you have put money away, these issues can quickly lead you looking for a loan to make sure that you don’t fall behind on your regular monthly bills. While you may be looking for Payday Loans that you can get either from those who offer Text Loans or Bad Credit Cash Loans for surprisingly little risk, you are also looking for peace of mind that you don’t have to worry about taking a credit hit, and further financial issues, due to events that have occurred.

A Wide Variety Of Events Can Effect One

Risk

There are certain events that are apt to lead you to financial issues. While there are a wide variety of things that can through you for a loop, there are some that tend to occur more than others. For example, if you have a car, you are going to have repairs and services needed here and there. Sometimes, though costs will eat into your savings, and affect your ability to pay monthly bills. Same goes for health issues that either lead a family member into the emergency room or, worse, spending the night in the hospital.

Be Smart About The Loan That You Pick

While there is no such thing as a “no risk” loan, there are some loans that are less risky than others. Payday loans tend to be on the lower side of the risk because they should be paid back the next month, and they are based upon the money that is coming in a paycheck.

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