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FTC Consumer Alert on Payday Loans

FTC Consumer Alert on Payday Loans

The Federal Trade Commission, known more commonly by the acronym FTC, has issued a consumer alert on payday loans. This article regarding payday loans appears to be geared more towards offline cash advances, but has info that applies just as well to online payday loans. They mention that payday loans, cash advance loans, check advance loans, deferred deposit check loans and post-dated check loans are all different names for the same thing.

The alert says that payday loans are expensive. Although advertises payday loan companies, we agree with this assessment. Cash advance loans are indeed very costly, especially if you look at it in terms of the APR like you would look at long term credit such as a mortgage.

However, there are times when you need emergency cash and you have no alternatives other than a cash advance. These emergencies when a payday loan is necessary are times that it makes sense to pay the cost. The key is to balance your budget and keep rainy day savings so that you do not need payday loans often.

The alert offers additional consumer tips as well. For example, they give more specific ideas for making a budget and for building up some savings. They also suggest that when you get a cash advance, you only borrow as much as you need. This keeps costs lower, since the more you borrow, the more you pay in fees and finance charges.

Likewise, the FTC suggests that when you need a payday loan, you shop around to get the best price. That is a reason why online payday loans are so nice, since on the Internet many different companies are just a click away. Plus, sites like ours make it quick and easy to compare various online check advance services.

So the bottom line is that you should try to build savings or look for other alternatives, since payday loans are a costly way of getting credit. But when you need a cash advance, you should shop around to get the lowest cost.

Posted by Cash Advance Planet
Mar 24, 2006 4:42 pm

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