I guess that’s one way of looking at it, but I don’t really subscribe. I think (actually know) that most people don’t come close to having the time and skill to know exactly how bad a deal they were getting in the face of the friendly commercials, smiling staff, and every other dirty marketing trick out there.

Sometimes I wonder how people could be so cruel as to work for these places or even own them knowing what they’re doing to the customers that use them. Oh wait, yes I do. They rationalize it by saying “they know (or should have known) what they were doing so they deserve the pain they get”. Like you did.

Cheers with that viewpoint of yours.

Financially speaking, they’re terrible. Doesn’t mean they are evil. You should, however, explore ALL other means to get the funding you need, before even *considering* a payday loan.

In the UK they are largely unregulated. They charge more that 1000% and use aggressive telesales methods to encourage people to rollover their loans or take out higher amounts. They even offer discounts for referring your friends! As soon as I am free of these loan sharks I am never taking out one of these loans again.
http://paydayloantrap.synthasite.com/

Also, note the fact that GoodMoney helps people convert their payday loans into low-interest loans from a partnering credit union. The fact that this is possible *at all* is a strong indicator that a great many of these loans don’t require such high interest rates in order to be profitable.

To say that payday lenders are simply filling a market niche is therefore a lie. In most cases, these lenders are not providing a useful service so much as taking advantage of their customers’ lack of financial education.

I mean, they do over the short term, but they don’t over the long term.

That is to say, once the loan is rolled over four times, lendees have the option of attending a finance workshop, after which their loan becomes interest free. It says so right in the article. If I took out a $100 loan with GoodMoney, and couldn’t pay it off for an entire year, the effective APR would be less than 50%. If I couldn’t pay it off for 5 years, the APR would be about 10%.

In short, trying to analyze GoodMoney’s service by referring to the APR is misleading. Trying to analyze other payday lenders by their APR is not, because that’s the actual interest you’re paying over the life of the loan, from the day you take it out to the day you pay it off. So citing GoodMoney’s APR as “proof” that payday lenders “need” to charge such outrageous fees is infuriating, and perhaps even dishonest.

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?