By: Revanche

Advance Paycheck Cashing: It’s not just in the local neighborhoods anymore

August 4, 2006

I was flipping through the junk mail a couple days ago and found, to my intense chagrin, that there was a flyer in the Valu-Pak for Paycheck Cash Advances. ONLINE.

Single Ma hosted a spirited discussion about this the other day and I frankly agree that those places are just awful. The discussion there had touched on the connection between the prevalence of these businesses in the black and/or economically disadvantaged and depressed communities. This is just another example of the widely expanded network of opportunity such predatory businesses have at their disposal with the internet … I wasn’t sure exactly how it worked so I clicked on one to check it out. At first glance, it looks like any other legitimate business, clean and well designed.
The first surprise I had was that the first link you see when clicking on Rates and Terms (after you’ve picked your state) is a link to your state’s regulatory agency for questions or complaints. Now that’s not something I’d expect to see for this sort of business.
The second surprise is that the maximum load amount is set at $250.00 for my state’s residents. That seems ridiculously low, at first, but it does underline the likelihood that the majority of this company’s patronage will be from the very low-economic strata. I mean, 250 dollars is a lot of money, but … not a lot at all if you’re talking about the entirety of a paycheck.
The third surprise was that the loan terms are spelled out in large type, even bold face. Definitely not what I expected from what I’d consider a rather seedy business.

But the last surprise? Wasn’t a surprise at all. Check out these rates:

Fees and Charges: Your loan fees will be $17.65 per $100 borrowed.



$100 $150 $200 $250
Term In Days APR** Finance Charge/APR**
8 805.28% $17.65
$26.47
$35.30
$44.13
9 715.81% $17.65
$26.47
$35.30
$44.13
10 644.22% $17.65
$26.47
$35.30
$44.13
11 585.66% $17.65
$26.47
$35.30
$44.13
12 536.85% $17.65
$26.47
$35.30
$44.13
13 495.56% $17.65
$26.47
$35.30
$44.13
14 460.16% $17.65
$26.47
$35.30
$44.13
15 429.48% $17.65
$26.47
$35.30
$44.13
16 402.64% $17.65
$26.47
$35.30
$44.13


So maybe the website isn’t in an economically depressed neighborhood, with shabby wallfronts and rundown decor, maybe there aren’t broken bottles littering the sidewalk, but this is definitely not a competitive-value-for-your-business sort of place. Where else can you find USURY stamped all over the place in not-so-invisible ink? 800%? Thanks, but no thanks.

2 Responses to “Advance Paycheck Cashing: It’s not just in the local neighborhoods anymore”

  1. shamedsteven says:

    Yeah, these places are just horrible, and it’s lousy that they are now online.

    Thanks for the info!

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