Payday loans may outstrip credit cards

[BrilloPad]

Payday loans may outstrip credit cards

I am Why pay several thousand percentage APR when you could pay tens of percent APR?

Personally I never borrow money except for my mortgage - but I would like to understand the reasoning.

[Notascooby]

Payday loans may outstrip credit cards

I am Why pay several thousand percentage APR when you could pay tens of percent APR?

Personally I never borrow money except for my mortgage - but I would like to understand the reasoning.

Probably as they've defualted on their CC repayments and have a tulipe credit rating to go along with their 52" plasma from Brighthouse and 2 Xboxes on littlewoods.

[Arturo Bassick]

Payday loans may outstrip credit cards

I am Why pay several thousand percentage APR when you could pay tens of percent APR?

Personally I never borrow money except for my mortgage - but I would like to understand the reasoning.

Did you read the article? It quite clearly states that people who do not have access to traditional loans like credit cards are turning to these pay day loan schemes. They are not using these people because they want to, but because they have no other choice. You may suggest that they should do without, but that would be an opinion based on no understanding of these peoples situations.

[NickFitz]

Probably as they've defualted on their CC repayments and have a tulipe credit rating to go along with their 52" plasma from Brighthouse and 2 Xboxes on littlewoods.

WNASS. The punters who go for these loans usually have no other lines of credit. Even if they have a credit card left over from better times, it'll be maxed out and they'll be behind on the payments.

[eek]

Must be almost be dumbest thing you can do, short of getting a loan from the local loan shark.

Yes but if you need money and can't get an interview with CAB to sort out your current debts its probably the only place you can get money.

The better plan would be to not pay off any bills until you've got all the food you need to last till the end of the month.

[SimonMac]

Payday loans may outstrip credit cards

I am Why pay several thousand percentage APR when you could pay tens of percent APR?

Personally I never borrow money except for my mortgage - but I would like to understand the reasoning.

Because I would imagine the traditional lenders are not lending money so they have little or no choice, I know every time I clear a credit card they drop the limit back down to near zero

[gingerjedi]

I'm pretty sure these firms are banned from operating in most civilised countries, they operate in the UK you say.

[rd409]

Well actually, if you consider the business model, the interest rates are pretty daft tbh. The law states, that you should quote an APR even though you charge a fixed fee. So if they charge 15 GBP for a loan of 100 GBP for 10 days, it turns out to be a massive % APR, because the fees and charges are suppose to be then converted into equivalent APR.
According to Wonga, their rate of interest is 1% per day. This service is actually good for certain section of society, who want an extra help to tide over occasionally and who are very good at managing their finances. If paid within the time frame, this may turn out to be cheaper than personal loans or similar credit facilities. The only thing that makes me worried, is that they are targeted at wrong kind of people. The one's who are not good at finances, and can easily get trapped in the spiral of debt using this form of quick credit.

[fullyautomatix]

What worries me is the increasing number of payday loans/ cash for your cheque kind of shops appearing on high streets. A number of companies are trying to cash in on the bad times tempting poor people into taking expensive loans.

[scooterscot]

I would rather declare myself bankrupt.