By the same reasoning, fast food chains should not sell burgers and fries to overweight people. Of course that’s ridiculous - could you imagine the uproar it would cause if someone were refused a meal because of their size?

Are they really suffering from payday loans, or a general lack of financial responsibility? Honestly, the same argument could be said that my parents are suffering from payments on a second mortgage, or my friends from college loans,… you name it. It isn’t the medium you use, it is the way and intent you use the medium. And what about the church, why are some in need among you? Can’t they help so that they get out of debt?

And how is a pastor an authority in finances? I mean, sure, they can give counseling in general, but they are not typically trained in economics, finance, accounting, or marketing. However, if this is an appeal to an authority of morality, I am a Christian (and plan to attend seminary in a few years, after I save up money) and I disagree with what Pastor said.

“No “lender” should be allowed to rent money. In the good old days, this was known as loan sharking.”

In business, what is a lender who does not rent money? Not a lender (or not one for long!). Maybe I misunderstand the meaning of renting money, but I would definitely not say it is loan-sharking by definition.

And as far as citing a real authority of morality:
Exodus 22:25
Leviticus 25:36-37
Deuteronomy 23:19-20
- Those passages are not applicable. We are not Israelites under the Law.

First and foremost, as has been poorly mentioned in this thread, payday services do not loan money — they rent it. Organizations that lend money are required by law to apply a portion of each payment to the principle. Thus, eventually, the loan is repaid. Organizations who rent money are not required to apply any portion of a payment toward the principle, so after paying a debilitating payment, the entire “loan” is still outstanding.

Second, payday “lenders” prey on desperation. The original author said it best. He didn’t want to ask family or friends for help, and didn’t feel he could or should wait to fix his car. He was desperate to avoid embarrassment and inconvenience, and there was the payday “loan officer” waiting to take a big chunk of his next paycheck to assuage his desperation. For every person helped by a desperation “loan,” there’s a small army that face bankruptcy.

I’m a pastor, and several families in my congregation are suffering from payday loans. Their stories are similar to the original author’s — except that due to hiccups and problems, they weren’t able to pay off the “loans.” They’re learning a hard lesson about giving in to desperation. I have one family that’s paying 40% EACH MONTH on $1000. Yup, that’s $400 each month, and the next month the $1000 is still due. The family has been suffering now for ten months — they’ve paid off the loan FOUR TIMES and still have no way to solve the problem because they never have enough money to actually pay down the principle. Payday loans quickly become shackles.

Is this fair? To whom? The lender? “Let the buyer beware?” Liars. That’s like excusing Exxon for charging the highest gasoline prices in U.S. history “because there isn’t enough supply” and then taking the largest corporate profit in U.S. history, which wasn’t possible without having enough supply. There isn’t an excuse for exorbitant greed and payday lenders shouldn’t have the right to charge debilitating fees under the guise of “high risk.” Another of my families was told he’d be charged criminally for check fraud if he didn’t meet their fee every month. He wasn’t told this when he got the “loan.” He was told this a month later when he didn’t have the money to pay the fee because gas prices went up. Now he’s having trouble feeding his family because he’s terrified of going to jail for check fraud. As far as I can tell, payday lenders go out of their way to make the “loans” as low risk as possible — and their profits prove it, they make money hand-over-fist.

Besides, any industry that feels it must advertise, not for its services, but to explain why their services are fair and legal, is predatory by definition. The commercials have been running in my area for weeks.

If the argument in favor of payday loans is that people tend to live paycheck-to-paycheck and may only need the loan for a week, my argument is, learn to do without for a week. No “lender” should be allowed to rent money. In the good old days, this was known as loan sharking.

Now, why is this the case? It is not predatory for the same reasons as stated by the informed few. But let us consider how a payday loan can be more cost-effective and practical than some other means:

1. A credit card that charges 18% interest.
2. Overdraft or non-sufficient funds fees.
3. Wiring money from family or friends.

1) A credit card, a very common method of getting into debt for a month or so to cover large expenses, can have horrible, lasting repurcussions from continuous debt. There are so many credit card companies because there is simply so much money earned from credit card debt that they can all be supported by the consumers. By contrast, a payday loan store may never report to a credit agency.

2) Banks, the best way of doing money in our economy, correct? Suppose you have a checking account and accidently write a check for $100 more than you thought you had in your account. It is going to bounce. The wonderful bank doesn’t mind. They will only charge you 30 bucks in many cases. A payday loan, according to Michigan’s state regulations, cap the fee for a $100 payday loan to only $15.45. Get that loan, deposit it into your account, then while you could have had a $30 blunder, instead you just reduced it a $15.45 blunder.

3) In that same scenario as the above, one could wire money from a friend or family member to cover the account issue. However, Western Union is likely to be $14.99 for the transfer, and I am not certain about MoneyGram. (this information is current as of my posting this). The local NationalCity bank will wire it over for 17 bucks. Payday loans don’t look so evil, now do they?

I work for a payday advance store. So let me inform for a moment further. Many of the customers that this store targets are people who need financial help. By their very nature, many of them have a hard time managing their money. Getting them to plan a budget and focus on paying back the loan without reborrowing (an admittedly common transaction after paying off the loan) is rather difficult. I personally offer free advice to make the best of our service and get out of debt fast. Antithetical to the business-scheme, but it is congruent with the purpose of a loan — to help someone through a financial issue.

After seeing all the customers, I hope I have learned to make margins of error in my spending and keep track of where my money is going. I will, as PennySaved has reminded us, regard the payday loan as a last resort. I personally refuse to spend my last paycheck, so that if I am in it deep, I have a whole paycheck as a buffer. It works almost like a payday loan, only to myself and it is free. Beyond that, I add more safeguards such as a few hundred dollars in case my car decides to break. On top of that, I will admit I do not use my checkbook ledger, instead I keep track of all my accounts in spreadsheets and I back up the files regularly. I keep my receipts to append to the documents.

These safeguards I just listed provide security in the same way that payday loan customers need, but do not create for themselves. Save yourself some hassle and some money. Get smart and use your money wisely, knowing all the choices and margins of errors you need for YOUR budget.