Posted by Mike on 14th June 2009
I received a flier with my bank statement.Â In it was an article announcing “Payday Freedom, The Alternative to Payday Loans.” I have noticed these payday loan operations popping up all over during the last five years or so.Â I have even seen them in fairly affluent neighborhoods.Â What started as a somewhat-shady, at the very least opportunistic, business is now legitimized by a credit union. Here are the “benefits” this “service” provides for the credit union’s members:
- No Credit Check
- LOW Fee – Only $12 per $100 Borrowed
- LOW Rate – Only 18% APR
- 30 Day Payment Period
Have we not learned from the recent financial trouble our nation is going through? It is hard for me to imagine how this can be a good deal for anyone!
- No Credit Check – The folks who need a payday loan are probably poor credit risks. Do you want that for you credit union?
- LOW Fee – Only $12 per $100 Borrowed – That’s 144% annually when compounded monthly!
- LOW Rate – Only 18% APR – Yes, this might be a low rate when compared to credit cards and payday loan outfits. I like 0% better when you don’t take out a loan.
- 30 Day Payment Period – I wonder what happens after 30 days?
This doesn’t seem to be a good idea for banks to promote.Â What about teaching people to be financially responsible?Â I guess you can’t get that from this credit union!Â I suggest Dave Ramsey.