4 ms·
It is not fair, nor is it reasonable. It's about as useful a metric as the weather forecast being provided in degrees kelvin. As someone that's had their ass s
by Karunamon 5y ago
It is not fair, nor is it reasonable. It's about as useful a metric as the weather forecast being provided in degrees kelvin.
As someone that's had their ass saved by payday loans a couple times, I'll gladly defend them every day of the week and twice Sunday. At no point was I ever unclear about payback schedules, the cost of the financing, penalties, any of it, and neither is anyone else with the financial literacy to have a bank account, a job, and regular paychecks/deposits, all of which are a requirement from your average lender.
- AlexandrB 5y agoYou need to borrow $200 for 60 days. Is it cheaper to do so for a flat $10 fee on repayment or by using a credit card with an APR of 20% (compounded monthly)? I can't do the math to answer this question in my head. I suspect you can't either. The point of normalizing the cost of borrowing money to an APR is so that a consumer can make this decision without having to solve exponential equations.
- Karunamon 5y agoIf I had a credit card with a limit large enough for the need, I wouldn't be even thinking about payday loans in the first place. This hypothetical doesn't happen in the real world; there's no time where even the most awful subprime credit card (even at cash advance rates!) will be cheaper than a payday loan. Its usefulness as a metric for a loan intended to be held for a couple of weeks to a month is very limited. Maybe when shopping across short-term lenders, but at that point, it's more intuitive to think in terms of how much the fee is in absolute terms.