Are Payday Loans Ever a Good Idea?

Watch "Facing Suicide" on ‪@PBS‬ • Facing Suicide: Let's ...
SUPPORT us on PATREON: / twocentspbsds
SUBSCRIBE to Two Cents! goo.gl/jQ857H
In desperate times, it might be tempting to visit a payday lender, but beware! These loans are engineered to keep you trapped in debt for years!
Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson, AFC®
Directors: Katie Graham & Andrew Matthews
Written by: Shanté Nicole
Executive Producer: Amanda Fox
Produced by: Katie Graham
Edited & Animated by: Dano Johnson
Fact checker: Yvonne McGreevy
Executive in Charge for PBS: Maribel Lopez
Director of Programming: Gabrielle Ewing
Assistant Director of Programming for PBS: John Campbell
Images by: Shutterstock
Music by: APM
Two Cents is produced by Spotzen for PBS

[@oscarsoto8428]

While the short answer is “No”, I’m glad they go over the numbers and figures about the situation with PayDay Loans. I’ve seen many videos about them, but I think a reminder to the public at large (or an audience that may not know) is always a good idea.

[@tonysoviet3692]

I'm just kinda sad that the "target audience" for these predatory practices will not likely see the video. Another point not mentioned is that payday loans are mostly located in immigrant neighborhoods, not only targeting those that do not have an understanding of interest, but people who are likely not even speak the language.

[@financialeducation-beeduca739]

Hey, i loved this video as well. I have some videos on the same topic in my KZbin account too. Check it out

[@thumper84]

@@tonysoviet3692 do you realize how racist that is? So you think immigrants are too stupid to understand money?

[@tonysoviet3692]

@@thumper84 dude, I'm a Vietnamese immigrant in the US. What I said is from experience.

[@pgppe9488]

@@tonysoviet3692That’s partly true, but payday loans are everywhere in low income neighborhoods and towns.

[@catherinebaldwin6580]

My financial professor worked at a payday load office as the only thing available for a job after school. He said it like burning in hell. He’s now educating people both in the university and at his own office about the dangers, and still fighting to stop them entirely.

[@terbrylewis6400]

Not all heros wear capes 👏🏿👏🏿👏🏿

[@thatonellamawhoissoobsesse8138]

Mind if I ask what you're doing to off center pay day businesses?

[@wturner777]

@@terbrylewis6400 Or have any super powers.

[@hopelesslydull7588]

I got into finance from a desire to help people but nobody would hire me but a payday loan company. It was torture. People on fixed income refinancing every month, people who I knew wouldn't pay us back and it'd be worse for them. We did underwriting and had a lot of angry people because of it, but there are plenty of people who *technically* can pay back loans but really shouldn't. The only situation I can see payday loans being "good" are if you are paid well, have no safety net of savings and have an emergency where you dont have the money right now and you desperately need it. Even then, the solution is to have an emergency fund you build before the emergency happens. Remember, a penny saved is a penny earned post tax.

[@vanivanov9571]

But aren't payday loans a matter of survival for many desperate people? It's a horrible option, but the other option could be living in a cardboard box, hunting rats because the lines to food banks are already miles long (no joke).

[@hopelesslydull7588]

@@vanivanov9571 in a similar way to overdraft fees, it could mean the difference between paying your rent or not, but it ends up magnifying that one bad situation into a 1-3 year long mistake that locks you into even worse crippling debt. I would always tell people to pay off as soon as possible because our company let you pay off early, because if a bad situation screwed you before you owed us money, it would absolutely fuck you if a bad situation hit you while you also owed us 500% APR.

[@vanivanov9571]

@@hopelesslydull7588 It'd be nice if they had other options. Not sure what they can do.

[@hopelesslydull7588]

@@vanivanov9571 It's a horrible position because I know that money can be literally life saving. That it is currently necessary and will always be necessary unless we live in a utopia where unavoidable financial disasters don't exist. A *lot* of the time, the money wasn't life saving. A *lot* of the time, people refinanced their loan over and over because it meant less bills this month and that meant more spending money. I saw their bank account info every time they refinanced. I know half of them were just making bad decisions because they could. In both scenarios, they're put at horrible risk of losing any kind of future wealth. Risking being stuck in poverty for the next decade because of, honestly, one of the kinder payday loan companies out there. We need far stricter laws about payday loans nationwide and far better financial education so fewer people willfully take out a payday loan when they don't need it.

[@vanivanov9571]

​@@hopelesslydull7588 Freaking heck.... Harder for me to sympathize with people who make extremely foolish decisions they never had to make. Payday loans being horrible isn't exactly a secret, nor is it surprising even if it was. Problem with increasing regulation is, as you point out, these are sadly necessary and their accessibility is important. If the regulation caused desperate people to be unable to get them, or resort to worse agencies, that'd be a serious problem. What I wonder what might be a better solution is just for the government to run its own payday loans program. It could run at a 100% APR, being self funding but far better than existing options, and it'd force the existing options to compete and improve their services. Except... government programs in the US are utterly bad and corrupt. Fixing anything in the US seems impossible at this point, I figure the country will fall like the Roman Empire.

[@rustyshackleford6799]

No. They are predatory loans. I remember learning about these. The interest rates are insane.

[@Alystas]

Saw that John Oliver vidéo too. One of the many business in the US who's business model can be summed up as : "We make the poor even poorer and profit on their despair and misery"

[@JivanPal]

@@Alystas Just FYI, payday lenders are not at all specific to the US.

[@bluey3575]

There should be law to prohibit this predatory lending. Its unforgivable to exploit the poor

[@markeastwood74]

In the UK a few years back, the government stepped in to limit terms and interest on payday loans. There were companies regularly displaying near 3,000% APR in the small print on TV.

[@JivanPal]

@@markeastwood74 Not much has changed in the UK. Rates of 1000% APR are still commonplace. It is only the _representative_ APR that is capped at 50%, but only half of all customers must be given that rate or better.

[@yankeefederer1994]

Please cover buy-now pay later trends. A huge financial literacy issue

[@lilyyoung1002]

Agreed

[@cosmojg]

Theoretically, the ones that offer 0% APR are a steal right now. It's like a free 8% annualized return after inflation.

[@ntmn8444]

It’s only a problem if you don’t know how to use it. I use BNPL to purchase only big ticket items, and I build in the total cost into my budget. If you use it and go on shopping sprees every day, then yes. That’s when it becomes a problem. But using this tool can be quite useful in money management and controlling your cash flow, and the fee for doing so is pretty reasonable compared to a credit card.

[@chocolatechick729]

Pay day loans are loops that are hard to get out of. I was stuck in one for a while. Until one day I had enough and told myself I have to get better with my money. 2 cents "Dumb with money" video was the first video I saw and then i watched all the 2 cents videos and realized I had to budget in order to get out of the pay day loan trap. I then applied Dave Ramsey's baby steps and now I always have money and have not gone back to a pay day loan place. 💰

[@Abbyyena]

Well done for seeking financial wisdom and getting out of the debt cycle.

[@magicman205]

I literally found this channel a few months ago because I wanted to become more financially intelligent after creating a massive debt due to payday loans.

[@MrAngryLawnGnome]

Look up Dave Ramsey and his "baby steps".

[@DemureSpectabilis]

We’re glad you’re here! The Financial Diet is another great personal finance channel here on KZbin. They take into account a range of factors that can affect how people (are able to) spend money, and they encourage realistic habits for managing finances responsibly

[@garrettcannon4051]

caleb hammer goes 1v1 and sits down with people in all walks of life in america so u can get some advice there

[@turtleanton6539]

Faxx😊

[@vanivanov9571]

Unfortunately, many still need to resort to these.... It's not a choice, it's deciding to survive another week so your children don't starve on the street.

[@zh512573]

Thank for this information. Starting to put together an emergency fund, even if you can only put away a few dollars every pay cheque, is really necessary for financial stability - it's a common piece of advice for a reason.

[@imp3r1alx]

5:20 if you are the borrower it is always better borrow from friends and families.. but if you are the lender, be careful of lending to friends and especially to family.. cause there is this mind set from borrowers , that "since you borrow from close relative, they will be no fees, no tax, no interest and even it is ok to miss a couple of times when the deadline hit" and the reverse is also true.. it is much, much harder to collect from families..

[@SamSung-jv3jm]

I was basically in the scenario given in this video. I didn't have covid but I had the flu all of last week. Therefore, Im only getting half my usual paycheck tomorrow. Luckily, I had been trying to start an emergency fund for the past few months. It wasnt a full 3-6month emergency fund yet but it was enough to cover for the lack of funds this time. I am able to pay my credit card bills and my part 1- rent payment for December. My motivation for obtaining a full 3 month emergency fund is definitely higher than it was before.

[@artemis_liz7096]

Great job!!!

[@Snittyguy]

I miss the moustache I worked at one of these places for like 2 weeks. It was terrible. I quit. Watching people in desperation. These places saying they were helping but only making it worse. Helping poor to be poorer. Employees laughing at and making fun of people when they walked out the door.

[@Abbyyena]

That’s terrible!

[@user-qi7oc7rm9m]

The short answer? No The long answer? NoOOooooOoOoOoooo.... Jokes aside, great video. I love how you dive into the details.

[@vicgamesvt9682]

Honestly the government should cap pay day loans at 60% APR, if this causes many of these places to go bankrupt than maybe this isn't a business that should exist.

[@inspirer4465]

Sweden has a cap of 40% / year

[@anonymousnearseattle2788]

There was this one guy last century who said usury is evil. We probably should have listened.

[@VisheshSharma]

Payday loans should be done by the government not individuals/private firms. Anyone should be able to loan out a few hundred dollars for cheap

[@vicgamesvt9682]

@@VisheshSharma that would be good also but the government still shouldn't have predatory intrest rates they should maybe charge 50% since they don't need to make a profit.

[@batrachian149]

​@@anonymousnearseattle2788 is talking about Hitler. Dude's a fascist trying to justify NSDAP policies, WWII, and the Holocaust by saying it was actually an attempt to stop usury.

[@Antonio_Ortiz]

When I was younger, I sadly didn't have a choice. Now that I'm in a much better situation, I can look back on it with a hard-earned truth: if you don't have strong enough finances to have good credit (and cards), you likely don't have strong enough finances to pay back a payday loan *on top* of your other regular expenses. And this may be common sense but I can't stress this enough: If you have good credit but can't afford to pay back your cards *on top* of your other regular expenses, you are in the exact same boat, just in a higher tax bracket.

[@BoldFollower]

I feel like its so easy to just say "live below your means and have an emergency fund" if you are young and single, but not you have a family. I used to be so judgmental to people who got these loans. I never had one ounce of debt when I was single... no loans, no credit cards, I paid for my cars in cash and always had stacks in the bank. I was fine to sleep on a couch, not go to the doctor or not eat to save money, not even because I had to, but because I wanted to. Once you have a spouse and children, it's so much more complicated and often inappropriate to do some of those things for any extended period of time. Literally 100% of the time I got raises for the past 3 years, it simply matches our increased expenses. I agree, ideally you live that way, but that's just not reality for most growing families, and many people do not have help of parents or a close community. I can totally see why these loans are so attractive and often... one of the only options. I still refuse to get one, but I do not look down on those who do, because, life is hard and answers are not black and white. It just sucks that these companies prey on people in their most vulnerable states. If you want to help, lower the dang interest or extend the payment period. You KNOW the type of people who get these probably have no other option, it stinks they are being taken advantage of. So sad.

[@g-rexsaurus794]

Those people are still fools, regardless of how you sugar-coat it.

[@233kosta]

Easiest way to shaft yourself is to move to an area which is overall too expensive. At that point, unless you find a job that significantly improves your income, you're going under no matter what.

[@BoldFollower]

@@233kostayeah but this isn’t always the case. In a perfect world you can control all variables, but in reality it’s very rare- and if you’re lucky to, then the variables might change too. We moved to a CHEAPER place but over the years others came to this city and everything from rent to groceries has gone up with it.

[@233kosta]

@@BoldFollower That's my point though. A few years ago I moved for a job and since then my expenses have been growing at a fairly steady pace. The annual "cost of living adjustment" supposedly follows the CPI/RPI, but in reality that's a bullshit statistic that is almost entirely meaningless. Not only is it not a true reflection of the value of the currency, it fails to even reflect the cost of living.

[@BoldFollower]

@@233kosta 👍

[@DejaVieu]

When I was younger and first going to college, my family and I had to immediately move out of our place. Of course, I'm helping to pay bills but only worked part-time and this unexpected move and the fees associated with it, left me in a bind. My cousin suggested getting a payday loan and out of desperation, (and ignorance), I went for it. Took another 2 rounds of payday loans, lowering the amount borrowed each time, to get me out of it. I remember after paying it off the last round: I had $20 to my name the week leading to payday and it was tempting but I was like, heck no! It's one of the sweetest feelings getting out from under that cycle. Funny enough, when I first went in to get the loan, the lady there was kind of attitude-y and borderline treated me like trash. After a year or so of paying it off, I got a call from her, all friendly, reminding me that if I ever needed money, they had funds available. 🤨 Nah, lady. Even if I did, I wouldn't be going back to you.

[@musAKulture]

doesnt...doesnt your country have a logical limit on the max interest rate for private lenders and loan companies...?

[@Greendaydude74]

My parents have had to go to multiple payday loan places in a week before...since bills were constant and work was not....definitely not a good idea...exactly what you described in this video is what happened...when we couldn't pay 2-3 back on time...they referred them to collections after a bit...such a pain...and interest rates are insane!! 🤯

[@jaredpatterson1701]

If you do pay them back earlier, can't you just use them to boost your credit score?

[@tommyshanks4198]

The short answer is yes. Take the cash, don't pay it back. At worst, it goes to collections and ruins your credit.. but your credit already sucks. Ultimately, all the payday lender can do is sue you in small claims court. File a defense that you were drunk or high as you cannot remember signing anything. Small claims is a court of equity, not law, and is backed up for years. Then, when the case is coming up within 2 months, file a motion for disclosure of all their electronic records. Then go back to court a month later and file a motion to dismiss for their failure to produce their records.

[@pxl_official]

I got stuck in one back when i was really broke. Ended up paying on a 450 dollar loan for half a year until i gave up. They eventually sued me, ganished my wages for 1800 dollars, and left it at that. Because the amount kept collecting interest

[@hinkhall5291]

This is marginally better than borrowing from a loan shark and having them break your kneecaps when you don’t pay.

[@defaultchan2115]

my mom tried it out once - not out of desperation,just to see what it's like. needless to say, she told me more often than not, not a wise idea and if Im can just borrow from her if im ever in a bind.

[@JosephDickson]

I'm sure Paula would work more hours if that was an option. That's the thing with payday loans. No one would use them until they don't have a better option.

[@adamschwartz484]

Because of the effects of inflation and stagnant wages, I'd like to see a video that focuses on the most effective ways for most to cut expenses, and the best opportunities to add income.

[@neychev]

who is this guy? where is the moustache!!

[@mcjon77]

This is just another example on how it's expensive to be poor in this country. Once I got a good job and was having my paycheck regularly deposited into my bank account. My bank gave me a $1,000 line of credit that was interest-free for 4 months. I just pull out whatever I want from that line of credit, and they take out 25% of what I owe them every month from my bank account. The irony is that my bank only gave me this line of credit because I typically have a decent amount of money in my account anyway. So it's a line of credit that I will never use unless it's a major emergency.

[@jorgemercado5750]

Thank you very much for sharing your knowledge. You are the best!

[@Mr.MallyMall]

Good video. 5 stars. Good job.

[@TNBuckeye1617]

I had a job interview at a payday loan company and (as I was already working full time) intentionally sabotaged my own interview about halfway through. It felt very wrong. We would be better off if Credit Card companies could offer high risk credit cards within rules that make it harder for high risk borrowers to get out of paying the debt but that still limit the interest rates that can be charged.

[@thumper84]

Or if lazy poor people stopped thinking they deserve the same things that those of us who arent lazy work and save for.

[@eegernades]

@@thumper84 many lazy people aren't poor. You got to get rid of that mindset. Makes you look at people less than human. It's gross and spits in christ name if you into thst

[@FoodStampHero]

@@thumper84because that’s why everyone uses payday loans. You sound foolish lmao

[@triple_gem_shining]

It's tough to see friends fall for these

[@WookieSenshi]

Short answer, no. done. Lol

[@ee4life623]

A video on Annuities would be great, how do they work and when is it a good idea. Unless yal already have a video on that. 👀

[@aw_shucks17]

tattoos are badass

[@officialflorint]

4:42 over $500+ fees? Lord who does that :/

[@jimmiejohnsson2272]

Its interesting to see these videos as once having been super broke, sleeping on couches, being stressed out over where your next meal is coming from and where your going to live next month. Being really broke is far, far worse than people imagine it to be. If you havent lived it, you cant understand it. Thats why I think people like to play games like ”oh they got themselves into these problems by taking stupid loans for frivolous spending! They just need to be more clever with money! They just need a budget!”, but the reality is that living as a poor person is a huge mental burden full of constant stress and depresion hanging over your shoulder. Most of us are born into poverty, as it carries over through generations. Im not poor any more, but its all really thanks to fortunate events around me that I had no control over. To think that people would start a business with a plan to capitalize on these unfortunate people is seriously sickening, these people belong in jail.

[@Athena_Light]

That's scary 😰

[@517wiiface]

I've said this on other KZbin videos but if you go to one of those place don't borrow more than $10! Or better yet, don't go at all!

[@thehive7571]

When I get with them I don’t pay them back till they send a letter saying they want to do a settlement so then I get it right for the amount I borrowed

[@officialflorint]

4:01 do payday loans report to the credit bureaus?

[@tommyshanks4198]

Yes and no. They do not report to the bureau. If they send the debt to a collection agency, then collection agency will report it

[@scottxiong5844]

Thanks for this. We need more financial advise and education like this.

[@DeadMoneyDragon.]

There's really only one machination where payday loans are positive expected value. As you know it takes money to make money, so if you are somehow able to generate returns on the loan greater than the interest accrued over the span of the loan, then you are freerolling.

[@dianet3994]

I like how he said "that's legal" NO JUDGEMENT. 😂💕

[@FinancialShinanigan]

Worst case whenever possible, get a 0% APR credit card and roll it over to the next one if you need to

[@theamazingTRK]

I loved the way she said " oh crisis avoided " and then he respond " or has it just begun " 😂

[@TumblinWeeds]

Idk man. The lady in the example for instance, would’ve become homeless without the loan. While she might regret it in the long term, in the short term it was almost certainly worth the risk for a roof over her head. And payday loans were the only people willing to “help.” She’d already exhausted all other options. If we had better social nets, she wouldn’t need the payday loan and they’d all just go out of business.

[@be14mi]

Honestly my advice would be as soon as you are able to (usually 18 years old) get the first Visa Credit card. Use it as a tool to grow and keep your credit score high. Best case scenario the points and rewards can be a nice bonus from time to time, worse case scenario you may end up paying a little interest during the hard times.

[@amandasift7537]

This vid does great at showing how predatory and insurmountable PDLs are, but then offer the most tone deaf, classist solutions "get a credit card, ask friends and family for a loan, have a yard sale" folks that are faced with having to go to a payday loan place dont have those options....thats the fkn problem.

[@leuc1823]

nice vid

[@Dragon-Slay3r]

50 cent fell as a corkscrew today for floor tile cover and it's many variations as I don't tell them what I do and they fighting in the dark, karma again I guess so plan was to take loan out from daughter for payday scheme 😭 I thought kraken agreed to pay 😭

[@jasonparkinson7621]

Very informative and educational. Gracias! 👍

[@andrewdemayo945]

Very glad payday loans are regulated in Australia. They are still rip-off, don't get me wrong, but they are, by law, limited to a 20% establishment fee plus 4% fee per month (almost all lenders charge that). Answer to the title question is still almost certainly no, however. Very worth looking at alternative options - utilities in Australia will offer hardship variations (you still pay the amount, but over a longer period), and there 4% a month is much higher than credit card interest.

[@whutever]

How can such predatory institutions even exist in the first place though? It serves no purpose other than trapping people into unserviceable debt.

[@TumblinWeeds]

The lady in the example for instance, would’ve become homeless without the loan. While she might regret it in the long term, in the short term it was almost certainly worth the risk for a roof over her head. And payday loans are the only people willing to “help.” If we had better social nets, she wouldn’t need the payday loan and they’d all just go out of business.

[@JivanPal]

@@TumblinWeeds The lady had myriad other options that are orders of magnitude cheaper, the most attainable of which was probably just using an unarranged bank account overdraft. People turn to payday loans because they are heavily advertised, and when you're desperately in need of help, you tend not to think through things and just take the first observed lifeline.

[@vanivanov9571]

I'd like this looked into more. Largely, I figure Olivia is correct, and it's basically the same reason the Irish fought for the right to sell themselves into indentured servitude in America--the alternative was starving at home. Some people may have better options they're not savvy enough to know about, and better options need to be advertised to them if so. Sceptical if all of them have these options.

[@JivanPal]

@@vanivanov9571 Payday loans typically _start_ at well over 100% APR and go into the thousands, plus charge many other admin fees. By comparison, a bank overdraft or credit card is around 40%-50% APR with much lower fees, and these are not difficult to obtain at such rates. Even with absolutely no credit history, a credit card at such a rate is easy to obtain, as there are specific credit card providers that target such customers.

[@whichwasher2007]

Pay day loans are never a good idea. Ever. But oddly in the UK back when payday loans were first being advertised. They had APR of 4000% And then there was the problem of fraud. Anyone could walk in with a addressed letter and name and get a payday loan.

[@MHKing03]

Almost never. Payday Lenders are basically legalized loan sharks. They should only be considered as a last (legal) resort and only for absolutely essential needs.

[@Post-MoMitch]

How these things are legal, is beyond me....

[@nodinitiative]

I call BS. I loaned to over 20 people and most without any interesr charge and yet, most of them still fail to repay me back on the agreed time and not even going to pay in installments

[@thumper84]

All consumer credit should be taxed at 5% . To many things are bought on credit

[@scrappychildhood6633]

Here I am my parents basement studying cyber security in may have a pending $140k a year job offer with the department of defense I just got to get the required certifications they want

[@francoisbelangerboisclair]

In Canada your example would not work. That would violate the article 347 of the criminal code. Any loan must be under 60% annually otherwise it's a federal crime.

[@ihmpall]

You need 90% of your income to pay a mortgage in Toronto and Vancouver. Canada is worse . Lifelong debt

[@donwald3436]

Damn this is a good business plan, I should open one!

[@jeffkadlec8264]

I made this mistake in my 20s. Thank God I worked at a Company that was willing to bail me out, with no interest!!

[@GGGeoff]

While I agree these loans are terrible, if they were outlawed, people would resort to loan sharks. While the interest that is charged is terrible, the payday loan store won’t break anyones legs.

[@MT-fl1eb]

The budget and emergency fund are so important to prevent this

[@user-jk2zm7uq5s]

"No, never" (Where "abstinence" is actually good advice)

[@andrewsteavpack9079]

The average APR being 500% is insane especially considering the typical borrowers are likely less financially educated and it’s framed as $20/$100 in 2 weeks

[@haroondaman7162]

Bro this sounds like a super good business model, it's like a loan shark, but it's legal.

[@craigcarter400]

As someone that was stuck in a vicious cycle around 2009-2010, I can vouch for how bad they are. Right before a law change in WA, I had to keep adding lenders to the pile just to play catch up.

[@DemureSpectabilis]

This fake two cents account is such a scam! A WhatsApp number?

[@thumper84]

No you chose to. You could have reduced expenses or increased income. Not that hard.

[@craigcarter400]

@@thumper84 Yeah easy to say now because of the labor shortage but at that time, there wasn’t anyone hiring because 2008 had just happened.

[@eegernades]

@@thumper84 people don't choose. During that time, many have applied to higher income roles and had the skills. But due to the 2008 crash, competition was far more fierce than today. 2 positions, 1 thousand applicants. People didn't choose not to get hired.

[@ryantaylor6530]

Your not fixing a problem with a payday loan just moving it and making it worse.

[@eprofessio]

Why would anyone take financial advise from a person who put their tattoos on a credit card and are in debt up to their proverbial eyeballs. It would be like a fat Richard Simons helping you work out.

[@bartpinkeye2020]

Can anyone say emergency fund.

[@StanSays]

0:48 subs say you only need Idaho, but I think that's a big ask

[@trevormoomaw]

Thanks you two!!!

[@aarononeal9830]

Two cents needs to talk about Ecosia they are a search engine that plants trees

[@boysponge705]

If you have to ask whether or not something is a good idea, chances are it is not.

[@quixomega]

No! Even if it means you end up in default on another loan. Default now is better than much bigger default later.

[@raventhorX]

so, two and a half minutes in and I see some irony. The one time you would want to eat that overdraft fee lol. Might have a bit of issue with cash for the next couple of weeks though but from the sounds of it paying that overdraft fee would be much easier than paying off a payday loan. For most people this would still be tricky as they usually have fixed days for income but this can come in handy for jobs that rely on tips as you might likely have the money in the next couple of days depending on how your establishment pays out tips.

[@JivanPal]

"jobs that rely on tips" 🤮 Please, America, get your shit together and make this phrase an anachronism. The rest of the world laughs at and cries for you when you use this phrase sincerely.

[@milkncookie]

Yes don't loan them any money, better to let them learn their lesson.

[@nunyabidness8281]

They are useful if you borrow 40% (max) of your check. So i make 1k every 2 weeks -> 400 loan.

[@233kosta]

Before even starting the vijayo, I'mma say "probably not". As bad as it is now, a 600% (or even the nowadays more typical for the UK ~50%) interest rate will make it infinitely worse. Hell, even your typical 20% bad loan/credit card is DEATH.

[@windingpath]

I come from another country, when I first heard about payday loans and their rates, I was completely shocked by the fact that it's a legal business in America.

[@officialflorint]

1:56 yeah she should just open a 0% intro APR credit card

[@Amir-jn5mo]

Why are these even legal to begin with?

[@Na0uta]

They can work, just don't do it to pay bills. I'd put it down for a sudden need to go somewhere far away and pay for it. But you don't have quite enough to cover the trip.

[@debbieframpton3857]

No to payday loans if you're short money before payday you're going to be short money on payday because you have to pay that loan back It's a vicious cycle

[@andrewreviewschannel883]

There no way someone will have 500 in 14 days so from the start you lose

[@VulcanOnWheels]

1:45 How high did you say?

[@outerheaven2k7]

No. The exploit mental illness. ADHD/Anxiety/Depression...these loans are down hill road to hell.

[@zwagig1761]

Payday loans should be called Pay more till you have no more

[@Rosetteismyname]

They can't make a dent in the loan because they require them to roll it over OR pay it ALL off. It appears many of them are trapped

[@ericphantri96734]

The problem is when we repay early they even refuse to accept early payment so they like to make more interest

[@LightSpeaker2k]

💯

[@juzoli]

There is already a product for this purpose, called “credit card”. It gives you a loan which you pay back at the end of the month. Much better conditions and much more flexible than payday loans.

[@elishabooker1230]

Absolutely!

[@Semelem]

4:08

[@christopherbiser3199]

I recently started seeing cashback apps like Upside and Receipt Hog on the app store, are these good ideas? Wondering if there was research out there

[@76luislara]

I took one of these loans back in 2006 when I was just arriving in Australia. I needed cash urgently, but as you mentioned is the worst thing to do. Never again, even a new Credit Card is a cheaper option.

[@TheOverThinker92]

Here in Canada, I always see payday loan stores in downtown and in low income neighborhoods, because they know who they are targeting. The same reason why you almost never see lottery stores in high income neighborhoods

[@anonymousnearseattle2788]

I have lent money to friends so they could avoid going to a Payday Loans place.

[@PutiFlip]

It’s been a couple years since I’ve seen an episode of two cents, and what in the holy name of Dave Ramsey? When did Phillip shave his mustache and get a sleeve?

[@feynstein1004]

They are. If you're the one lending 😅

[@UserNameAnonymous]

Wait, they're predatory because they DON'T underwrite the loans??? I've also heard that lenders are assholes FOR underwriting loans. which is it?

[@CerebralTombstone]

“Woody Harralson high” huh? I’m living for this trend of wholesome KZbin channels getting a little more edgy. I genuinely love this channel, by the way.