Lawrence Myers is Right

If you get a chance, read Lawrence Myers blog post titled Payday Loans: Calling out Josh Kalven.

Besides the fact that Josh Kalven doesn’t know what he’s talking about, Lawrence basically gives the borrowers’ options. I think these are excellent (excerpt from his blog) and worth sharing:

Options are limited, and payday loans (and installment loans) are neither the most nor least expensive.

A) Borrow from friend/relative/employer?Cost: Zero???Risk: Complication of important relationship, embarrassment
B) Credit Card Cash Advance ???Cost: About $1 per hundred every two weeks???Risk: Fail to pay; credit rating is damaged
C) Pawn something???Cost: $9.50 per hundred every two weeks???Risk: Fail to pay, you lose the personal item.
D) Payday/Installment Loan???Cost: Averages $16 per hundred every two weeks???Risk: A collection agent tries to recover what’s owed; no damage to credit rating; no personal item at risk; no personal relationship at stake. ???Myth: “Cycle of Debt” – 94% of loans are paid back on time — that statistic is available in every single SEC filing of all public companies.
E) Online Payday Loan??Cost: $25 – 30 per hundred borrowed every two weeks??Risk: Same as regular payday loan, but industry is unregulated and identity theft is easier.
F) Bounce a check???Cost: Averages $45 per hundred borrowed???Risk: As soon as you bounce one check, you risk creating a domino effect, causing other checks to bounce and running those fees even higher.

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