You're short on money and payday is around the corner. What's wrong with getting a few dollars now to tide you over? Plenty.
The payday loan business is a numbers game. And when the math is done, it's clear that the house always wins. The scheme is called a "payday loan" because a borrower is supposedly getting a cash advance on his next paycheck. The practice is also referred to as a cash advance or check advance.
The Center for Responsible Lending estimates that predatory payday lending costs Americans $3.4 billion per year in excess fees. The payday lending business model is designed to cultivate repeat borrowers. You'd be wise to avoid the trap.
For many people living on the edge, financial management is a constant battle between time and money: In any given month, is there "more month than money" or "more money than month?" Some turn to payday lenders.
Consumers who use Internet payday lenders already take on financial risk from exorbitant fees and interest rates, but a recent report on Internet payday lending points out another important danger: security risk.