As many potential guest posters have learned by now, I have an intense hatred for the concept of payday loans. I thought it was time to write about it so that, hopefully, it will prevent more people from sending me material wanting to promote it or any website that offers it.

What payday loans offer people is the opportunity to basically take out a small loan based on the “fact” that they’ll be getting paid and will be able to immediately pay back the loan. In theory it sounds like it might be a good deal because if you wanted to go to a concert on Thursday night but you didn’t get paid until Friday, you could borrow the money for the concert and pay it back when you got paid Friday.

My problem with it is that it’s predatory on so many levels. What are those levels?

1. It caters to those that don’t make much money. Let’s face it, rich people don’t need anything like this.

2. The interest rates can be phenomenal. You’re not getting a loan for a nominal 5% rate; who’d make any money off that? In some instances your interest rate will be as high as 400% as an annual percentage rate, possibly more.

3. They could lie to you about how much you have to pay and how often. It’s so bad that the Federal Trade Commission has sued a bunch of them for violating federal law.

4. Many of them want access to your bank account to withdraw payment automatically. This is always dicey to begin with but these folks could really hurt your bank account with untimely withdrawals.

5. What happens if you can’t pay them? What if you lose your job and suddenly have to extend the time on the loan? What if there’s a hiccup in your pay?

You know what? If you want to do a payday loan you’d be better off going to a loan shark. Sure, it’s more dangerous, but he’s not going to ask for access to your bank account.

My advice; don’t even think about doing this. There’s always another way to get some temporary money if you absolutely need it, and if it’s just because you “want” something,… you should have saved up for it. Be safe and smart with your money.

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