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The DesMoines Register has a great column about how payday loans don’t really help the poor manage debt but in fact creates new debt and more stress. I couldn’t agree more!
The Des Moines Register: "A single payday loan is a terrible deal. The $15 fee on a two-week, $100 loan yields an astronomical 390 percent annual percentage rate. At that rate, a payday loan is comparable to money from a loan shark or the Mafia, albeit with better customer service."
Not just that, but taking out payday loans with their astronomical interest rates can create a new financial disasters for those already teetering on the edge. These loan services require that you write a post-dated check for repayment. What if you don’t get paid on time and your checking account is short? Now you have a bounced check, bank fees, fees from the payday lender in addition to the money you owe, plus interest. If you find yourself repeatedly needing payday loans to make ends meet, you may want to seek financial or credit counseling.
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