Save cash by getting a payday loan rather than an overdraft

Though it appears a wild claim, a person can actually get a payday advance and wind up saving money. There are good intentions behind some of the people who slam the industry. When slamming the industry is something most are happy to do, there is something they never mention while doing it. Believe it or not, the average family spends more in overdraft fees than fees on a cash advance.

An overdraft works like a payday loan

There’s a very similar pattern between overdraft charges and payday loans. They work nearly the same. A certain amount of money is loaned, by a bank, and then a fee is assessed for lending the funds to cover a transactions. Basically, an overdraft is the very same thing as a short term installment loan from a bank. The difference is, nobody really wants to overdraft, and a lot of individuals do it accidentally. Thus, when a individuals overdraw their accounts, they aren’t usually choosing or deciding on the amount they want to borrow. An overdraft fee is also charged each time if there are multiple overdraft fees which ads up. Overdraft fees are really costly. At Bank of The US and Wells Fargo it is $35. These fees really help the bank out when it comes to making cash thinking about banks make 21 percent of net operating income and 43 percent of non-interest income off of them. Even credit unions make 60.4 percent of revenue this way. You are losing. It! 217;s a lot of instant cash lost.

A lot of overdrafts equal a huge amount

In 2009, 12.7 overdraft fees or non-sufficient fund fees came from the average household with a checking account, as shown in a 2010 report by Bretton Woods Inc., showing an increase in NSF/OF fees from 2008 that were at 11.8. The average NSF/OD fee, from the same study, was $29.58 in 2009, meaning that at 2009 rates, the average household with an active checking account pays $375.67 or more in OD/NSF fees annually. The average cash advance is $350, and the average fee is $47.50. It is typically cheaper to get a cash advance than pay for the multiple overdraft fees that can occur in just one occurrence.

The bank institution

Why do banks get off the hook for these fees? Well, it is simple. Banks are never kept accountable for what they do. This is because they’re institutions and can get away with it. Find some more Payday Lending Facts and Statistics record on Personal Money Store.