In what universe does a one percent check cashing fee exceed a $35 overdraft fee for overdrawing a checking account by $.01? (Photo: flickr.com)

In the 1960s and 1970s, many of America’s largest banks decided to go “where the money is” by pulling their branches out of the inner cities and focusing more on affluent areas. It may be sheer coincidence that infamous bank robber John Dillinger once gave that response to the question of why he robbed banks, but I’ll leave that for you to decide. Only in recent years has that trend begun to reverse.

What this exodus created was a growing population of “unbanked” individuals and families, people who depended upon everything from shoe boxes and coffee cans to store their money to check cashers for paycheck services and payday lenders for emergency cash. The traditional view society took of such people who depended upon check cashing and payday lending was that they were the “unsophisticated poor.” However, re-examination of this idea is advisable, as the truth may be that the unbanked are more knowledge about what the banking establishment is foisting upon consumers that we’re willing to admit.

Avoiding the World of High Fees

A recent New York Times article explores the phenomenon of why so many people are resorting to alternative measures rather than depending upon traditional checking accounts. While the journalist fails to produce any conclusive reasons, it doesn’t take much to read between the lines – the cracks in society’s pavement, if you will: overdraft fees of $35 per infraction for a checking account mistake are exorbitantly more expensive than a check casher’s fee of a few percentage points to cash a paycheck.

Jose Abreau Says “No”

A 37-year-old native of the Dominican Republic, Abreau denies the bank representatives who come to his New York coffee shop to recruit him into the world of traditional banking. He doesn’t see the point, as what money he earns beyond his immediate needs is sent to his family back home. He does this in spite of the fact that banks are credit unions are within easy reach. However, so are check cashing businesses.

A recent Pew poll indicates that 86 percent of licensed check cashers in Manhattan are located closer than four blocks from a bank or credit union. People like Jose Abreau actually walk past the banks and credit unions to get to the check cashing businesses and payday loan stores. Perhaps this is because many immigrants come from countries where friends or relatives lost money due to bank collapses or corruption (where there was no FDIC to step in and insure the deposits), but in reality there are a wide variety of reasons. Language barriers can exist, but community outreach groups are available to assist. Financial education is available for those who may not understand how traditional banking works. However, the way many banks treat consumers stands at the top of the list as to why someone would not want to rely upon the banking monolith.

Not So Unsophisticated, Are They?

Millions of Americans live from paycheck to paycheck. That’s a fact that the current recession has made painfully clear. Yet this does not mean that these consumers who are just making it are unsophisticated. On the contrary, they’re educated enough to see that if a surprise expense or miscalculation dips their checking balance into the red, the resulting overdraft fees are unconscionable. Rather than having such an organization hold their money hostage, many people feel more comfortable with check cashing, where all the money they have is right there in their hands. Check cashing fees are much lower than any overdraft fee or minimum balance penalty.

How Much Lower?

Consider this. Many banks extend customers the “courtesy” to use ATM machines to withdraw more than they actually have in their accounts. This comes with a heavy – and damningly silent – penalty. We’re talking 200 percent on overdraft fees or more. How is this no legal fraud? How can this be advertised as a courtesy? Is it any wonder that check cashing customers don’t want anything to do with such institutional treachery? If banks would charge no overdraft fees and simply not allow purchases that would create overdraft to go through, they’d probably draw more of a customer base. But banks depend upon overdraft fees for much of their operating profit, so it’s clear that they have little incentive to stop.

Imagine this scenario if you don’t already understand just how disillusioned some are with banks. If a working poor family bounces a single check – let’s say it’s for a mere $3 – there’s an overdraft fee of $35 or more. That could be a weekend’s worth of food for hungry children, plus diapers and subway fare. If the family doesn’t keep their balance above a certain figure, they could be paying even more. Yes, if overdraft fee policies were different, I’d be telling a different tale. And some banks and credit unions do offer free checking. But not everyone meets the credit or documentation requirements, or their local bank many not offer the service. For the transportationally challenged, that means taking what’s closest to home.

What Carrot Could Banks Possibly Offer?

Banks are crying out for customers in this recession, aren’t they? What kinds of incentives could they offer to make people want to use their services? Aside from being able to receive direct deposit or develop a credit history, it seems that people would like to earn a decent amount on their money. But savings accounts that offer .0125 percent interest don’t cut the mustard, let alone the artificial buttery spread. It’s better than nothing, but not by much. Factor in the fees and penalties and traditional banking can feel as good as a sock in the eye.

Hiding from “The Man”

Those who avoid traditional bank accounts for the services of check cashers may be hiding, too. I mention this not to justify the practice, but it’s something of which we should be aware. Without a checking account, bill collections and courts have one less option for skimming cash in the event that the consumer owes money. Of course wage garnishment is still a possibility. And what about those people who avoid traditional banking because their income is under the table? Being able to cash in on certain welfare benefits is a powerful lure, which could explain why some consumers don’t feel the compulsion to put their money in the bank where it can be detected so easily.

Not Such a Rosy Picture for Most

One reader commented on the New York Times article in a manner both poetic and bitingly real:

O, these great unwashed masses, unwilling to strap themselves to our glorious consumer banking system where they can know the joys of ATM fees, NSF fees, account maintenance fees, account research fees, etc. , all while enriching themselves on the 1.8 percent interest rate! What is wrong with these people? Don’t they want to be part of the American Dream?

Avoiding traditional banking is second nature for many, but steering clear of it entirely can have its disadvantages. Check cashing is an attractive option for those who can ill-afford the predatory practice of overdraft fees. Unfortunately, that would include most people. Many who have money do not understand just how much the deck is stacked against those with so little. Bank presidents think in terms of profits; bank customers hope not to run afoul of bank policy, as they have become increasingly unprofitable for consumers with each passing year.

This should be considered a deadly weapon, in light of banks' runaway abuse of overdraft fee policies. (Photo: flickr.com)

Overdraft fees across the board have attracted the interest of Congress lately. Many have said that the way in which overdraft fees are assessed by banks and credit unions is predatory and dishonest. Charging the same high fee for each infraction – even if is for 1 cent – and then charging an additional fee for each day a customer’s account is overdrawn makes it nearly impossible for  already cash-strapped consumers to raise their heads above water.

In a recent case before California’s Supreme Court (Paul Miller et al. v Bank of American, NT & SA No. S149178), the ruling from Kruger v. Wells Fargo Bank (1974) 11 Cal.3d 352, 356 [113 Cal.Rptr. 449, 521 P.2d 441] (Kruger) was put to the test for Paul Miller, a retiree who depends upon Supplemental Social Security for his income (since 1992). Funds are directly deposited into his Bank of America checking account (since 1994). At the time that the direct deposits began, Miller was promised by Bank of America employees that those deposits would “be safe from debits or charges” unless he authorized otherwise.

But Overdraft Fees Came Calling

First, Bank of America accidentally deposited $1,799.83 in Miller’s account. They realized the error and reversed the credit, but not until Miller had made some charges. B of A also failed to give Miller notice of the deduction. The result was that his balance dipped below zero. Overdraft fees followed, which depleted a social security payment. For reference, Bank of America’s NSF fees at that time ranged from $14 to $32 per transaction. Up to five NSF fees could be processed against a checking account per day, with a maximum of $160 in overdraft fees allowed.

Miller pointed out that depleting his social security payment made it impossible for him to pay his rent or living expenses. Yet Bank of America told their long-time customer that he’d have to repay the part of the erroneous credit that he’d spent, but that he “could open a separate checking account for his SSI deposits that would not be used for repayment.” Miller did this, but a few months later the bank twice dipped into this new account to cover the overdraft fees. Both times Miller complained and the money was credited back to him.

And the Same Thing Happened Again

Although he did so infrequently, Miller occasionally overdrew his checking account. Each time, Bank of America hit him with overdraft fees that automatically deducted from his social security income. Bank employees who’d previously assured Miller that no deductions could be made from social security deposits without authorization now claimed that such funds received no “special treatment.”

Interestingly, during trial, a Bank of America executive responsible for checking products at Miller’s branch testified that Bank of America “could develop the capability to identify accounts into which public benefit funds are directly deposited, and could bypass charging NSF fees to those accounts.”

Why Didn’t Bank of America Take the Customer-Friendly Route with Overdraft Fees?

The same executive testified that “in order to prohibit certain account holders from overdrawing their accounts (which would eliminate the Bank’s need to recoup overdrafts or charge NSF fees), the Bank would have to ‘bounce’ more checks, withhold check deposits for the maximum allowable period of four days instead of one or two days before the Bank would make the funds available for withdrawal, eliminate point-of-sale purchases (but not personal identification number (PIN) transactions), and restrict automated teller machine (ATM) withdrawals from non-Bank ATMs.” The executive also stated that larger transactions would be processed before small – regardless of when the transactions occurred – because Bank of America felt larger transactions were “more important.”

More Important for Whom?

Any consumer who has felt the barbed sting of overdraft fees knows that the reordering of transactions is a way that banks stack the deck against consumers. Bank of America claimed in the Miller case that “the Bank’s practice of processing larger transactions before smaller ones results in the same total amount being overdrawn from a particular account.” Yes, but as Mr. Miller’s team clarified, doing so “increases the number and amount of NSF fees imposed.”

Miller would have none of that. His complaints alleged such things as “fraud, negligent misrepresentation, and intentional infliction of emotional distress, as well as violations of Code of Civil Procedure section 704.080; the Consumers Legal Remedies Act (CLRA), Civil Code section 1750 et seq.; the unfair competition law (UCL), Business and Professions Code section 17200 et seq., and the false advertising act, Business and Professions Code section 17500 et seq.” That’s a lengthy list of charges. How would Bank of America fare?

Nearly $300 Million at Stake in Overdraft Fees Alone

The California trial court found that fraud, negligent misrepresentation, CLRA, UCL, and false advertising claims were all viable issues that could be tried. A class was even certified that included “[a]ll California residents who have, have had or will have, at any time after August 13, 1994, a checking or savings deposit account with Bank of America into which payments of Social Security benefits or other public benefits are or have been directly deposited by the government or its agent.”

By the numbers, Bank of America had 1,079,414 such accounts in 2003. They received more than $800 million in government benefits via direct deposit. From January 1994 to May 2003, Bank of America took “at least $284,211,273 in NSF and other overdraft fees from accounts containing Social Security direct deposits.”

What Did the Jury Find in the Miller Case?

The jury found that Bank of America violated the CLRA by “falsely represent[ing] that it ha[d] the right to use Social Security funds from direct deposit accounts that receive government benefits including Social Security funds to pay overdrafts, insufficient fund[s] fees, . . . and money claims it has against class members.” Thus, the jury awarded $75,077,836 in compensatory damages for the class action. Each member also received $1,000 in statutory damages. Finally, Miller received $275,000 for emotional distress.

However, the Court of Appeal later reversed the trial court’s judgment, holding that Kruger did not apply. This is apparently still under review at this time.

What is the Kruger Argument?

Essentially, Kruger stated that a bank “may not exercise its right of setoff against deposits which, derived from unemployment and disability benefits, are protected from the claims of creditors.” But the Appeals Court found that the 1974 Kruger ruling “only applied to cases in which government payments were redirected to pay debts outside the bank.” Overdraft fees, by that logic, are internal debts.

The Office of the Comptroller of the Currency (OCC) sided with Bank of America’s ability to honor overdraft fees in the event of insufficient funds. They claimed that banks can do this without infringing upon 12 United States Code section 24, par. Seventh, or 12 Code of Federal Regulations part 7.4002 or 7.4007 (2009). (Letter, at p. 1). Overdraft fees are considered account maintenance, rather than creating a debt that the bank later collects.

The Consumer Loses Again

Runaway overdraft fees continue to plague consumers who can ill afford them. This is not to say that consumers should not be responsible for their expenditures, but in the case of Miller, I would argue extenuating circumstances. Until this is settled in California court – and until Congress forces banks to curtail abusive overdraft fee practices – the old phrase “buyer beware” still applies. At least there’s no deception with payday loans…

Money for nothing

In these difficult economic times, the average American family is forced to live paycheck to paycheck — if they are lucky enough to have jobs at all. When the U.S. government bailed out Wall Street, the major banks got huge cash infusions. Since then, major banks like Chase and Bank of America have been reporting record-breaking profits.

Is this because they are making profitable loans to consumers and businesses, earning money the way banks traditionally do? No. In fact, banks’ lending levels are the lowest they have been in more than a decade. What is the secret to their record profits? Fee revenue, or as we all call it: Overdraft Fees.

NSF fees are costing Americans billions

According to the Washington Post, consumers paid a stunning $23.7 Billion dollars in overdraft fees in 2008, and that number is expected to rise dramatically in 2009. An estimated 51 million Americans have been forced to pay at least one overdraft fee in the past year at an average of $35 each.

Ouch. These fees are making cash-strapped families hurt even more. What is worse, banks used to have more forgiving policies regarding overdrafts, but now some only allow one overdraft fee per year to be removed.

Congress is regulating overdraft fees

Congress is considering overhauling the laws that govern overdraft fees, but it could be years before those laws go into effect. Yet, many Americans have discovered a secret method for preventing overdraft fees and saving money, while being able to cover their daily expenses until their next paycheck. What is the secret? Online payday loans.

Borrow money through your computer

Most Americans loathe the idea of getting a payday loan from a cash advance store in a strip mall. People are embarrassed to admit they are having financial difficulties, and frankly being seen at a payday loan store could be a huge social stigma.

Thankfully, the internet has revolutionized the way people can borrow money when they need it. You can receive up to $1,500 in two hours or less, and have the money deposited directly into your checking account. You don’t need good credit to qualify for these loans, and you don’t even need a fax machine!

The true cost of overdraft fees

Look at the math. Say you were getting paid on Friday, but your bank account came up just $3 short on Thursday. One single overdraft fee would cost you $35, creating an effective annual interest rate of 260,245 percent! As most people know, having just one overdraft fee is rare when your account balance is low. If you just buy gas, go to the grocery store, pay for child care, and pay your electric bill the day before payday, you could owe $140 in overdraft fees and in reality be paying more than 1 million percent interest!

Payday Loans help you save

Online payday loans just make financial sense. If it cost you $15 to borrow $100, and it saved you $140 in overdraft fees, its like putting $125 in your pocket. The key to saving money on payday loans is to make sure to pay them back quickly, as the fees can get expensive over time. If you don’t have the money to pay the loan back within then next two weeks, consider an installment loan, which offers a more affordable payment plan.

Your secret to beating the banks

Your banker will tell you that payday loans are dangerous and expensive. What they don’t want you to know is that they are making a killing on overdraft fees, and wouldn’t want that money to go away. Do your own homework, and you’ll find out that banks are profiting billions while America suffers. Take matters into your own hands and get an instant cash advance today.

If you need an instant cash advance, APPLY HERE

Even a place like this is hard to enjoy when you don't know what you're paying! (photo: wikimedia.org)

Now that the recession is leveling off, many people are getting ready to start using their credit cards again. Because the economy is projected to reach its turnaround point mid-summer, consumers are looking to use their cards to pay for summer vacations.

Marilyn Dean of Los Angeles, California stated, “We haven’t had a real vacation in two years…the first year we just opted not to go but the second year the recession hit us hard and we couldn’t.” Like many other Americans, Dean is planning for a year of normalcy, and that includes a well-deserved vacation.

Paying for vacations

When it comes to paying for vacations, many Americans are looking to their credit cards. Anne Banas, editor of SmarterTravel.com, stated, “It’s pretty much the best way to make a purchase, especially your big items. It’s just really easy. And you don’t lose much in the exchange.”

Some consumers are worried about exchange rates, however, those are secure. Both Visa and MasterCard secure money based on “wholesale rates offered to large banks and corporations,” instead of the retail rates most customers are charged. Every time Americans use a credit card for an overseas purchase, they are guaranteed an excellent exchange rate.

Stiff fees for overseas purchases

Although the exchange rate is taken care of if a consumer pays with credit cards, there are other things to be aware of when traveling. Fees can crop up quickly with any overseas purchase. Most banks charge a “currency conversion fee” when their customers purchase items outside the US. This fees can range anywhere from 1% to 3% of the purchase price. Consumers should do some advance planning and call their credit card companies to find out what the fees for foreign conversion are.

A recent study by Bankrate.com showed that Capital One was the only card company that did not pass the conversion fee on to their customers. If you know you’re going on vacation in a few months, it may benefit you to open a credit card account that has no conversion fees and use it solely for travel.

Over-the-top fees for cash advances

Taking out cash advances on credit cards is a huge budget-breaker. Interest rates on cash withdrawals often exceed 20%, and that interest begins accruing from the minute the money is withdrawn. David Lytle, editor of Frommers.com, stated, “The rates on those things are awful. It’s the worst way to get money.”

Hidden fees for debit card withdrawals

When traveling abroad, the best way to get money is to use a local ATM and a debit card. A debit cards is linked directly to the cardholder’s account, so it deducts funds automatically. Consumers should be aware, however, that some banks charge anywhere from $2 to $5 for each withdrawal from an ATM outside their network. It’s also possible for some banks to charge 2 to 3% of the amount withdrawn with a debit card at an ATM.

Consumers need to understand the fees and policies of their banks before they travel abroad, and if they find a bank that offers a better deal it may be wise to open a special travel account. With some careful research and planning, paying for  an overseas vacation really can be worry-free.

With this debit transaction cost $35 more than you think?

The Associated Press reports that some senior congressional Democrats want to draw up legislation that would limit how much banks can charge customers in overdraft fees. Personally, I have been slapped with $105 in overdraft charges before for transactions that equaled a lot less than that, so I certainly would feel better knowing that banks are no longer allowed to charge $35 per purchase

Of course, I could have saved a lot of money if I had gotten a payday cash loan. The average fee for a $100 payday loan is $15, so if I would have been smart and taken the initiative, I’d be $90 richer.

Picking on payday loans

Of course, banks do not want this legislation to become a reality. And, of course, as banks always do when when people point out their unethical practices, they are trying to shift focus onto a different institution. The common strategy is that when people say “banks are bad” the banks say “payday lenders are worse!” Even though this is totally untrue. The Associated Press reports:

Michael Menzies, president of Maryland’s Easton Bank and Trust Company, said eliminating overdraft protection for many customers will mean denying charges and embarrassing customers or forcing them to rely on high-cost payday lenders.

Clearly, Menzies has no idea what he is talking about. The numbers I have already presented you with prove that overdrawing your bank account is more expensive than getting a payday loan, even if you’re only charged once. How can a guy whose bank charges $35 when someone goes $1 over their balance point fingers at payday lenders, who charge $15 for a $100 loan?

Overdraft fee legislation

The idea behind the overdraft fee legislation is to require banks to ask customers whether they want overdraft protection or not. Banks insist that their customers would rather be charged an overdraft fee than have their debit card denied, but I am pretty sure that is universally untrue.

How many people do you think have kicked themselves because they bought some cheap thing they didn’t really need and ended up paying an additional $35 for it? Another idea for the overdraft legislation is that banks would only be able to charge customers overdraft fees once a month and no more than six times per year. I think that regulation would really help out customers and it definitely makes sense. I think it is atrocious that banks can charge such high fees over and over, each time you make a purchase after your account is overdrawn. I think it makes a lot more sense to charge the fee only once.

Proportional charges

The senators also say the legislation should require that banks base the overdraft charge on the amount by which the account is overdrawn. As it is now, most banks charge $35, whether the customers overdraws the account by $2 or $200.

Essentially, an overdraft charge is the bank’s way of lending  you money for your purchase — with or without your consent — and charging you for that loan. A $35 fee for a $2 loan is a little ridiculous, but $35 for $200 is understandable.

Get instant payday loans without leaving the house

I was chatting online with my friend one day, and he wrote, “OMG, I almost overdrew my bank account!” So I asked him what he did to avoid it, and he wrote “Yay for short term loanz!” (That’s how he spells it; he considers himself quite the comedian.) I asked him how he got his short term loan, and he told me he had gone to a local payday loan store.

“Didn’t you know you can get instant payday loans online?’ I wrote. He replied that he knew he could get a payday loan online, but he thought he’d have to wait to get his money, and he needed cash right then. “You needed it in less than two hours?” I asked. “Well … no,” he wrote.

Same money, less hassle

I told him that if he had applied for an instant payday loan at Personal Money Store, he would have had money deposited directly into his bank account in as little as two hours, he was surprised. When he thought about the time he’d spent going to the payday loan store and then going to his bank to deposit it, only to go home and pay bills online, he agreed that he’d have saved himself a lot of time and effort by getting a payday loan online.

Furthermore, he told me how much the lender’s fees were at the payday loan store, and they’re the same or even more than lender’s fees available online! I was glad we had that talk, and so was he. Next time he can save himself some hassle, some time and maybe even more money than he saved in the first place. He’d gotten a payday loan so he wouldn’t overdraw his bank account, so he ended up paying $17 rather than the $35-per-transaction bank overdraft fee.

If you need an instant payday loan, APPLY ONLINE for a hassle-free loan.

Payday loans help in many situations

I know several people who have gotten payday loans for all kinds of different reasons. I’ve had friends who used them to get their cars back from tow yards that charge hundreds of dollars a day if you leave them there. I’ve had relatives use payday loans to avoid overdrawing their bank accounts.

So what exactly is a payday loan? A payday loan is a low-rate personal loan that gets cash into your bank account immediately. You can find out instantly if you’re approved for a low-rate personal loan and have access to your cash in just a couple of hours.

How do payday loans work?

When you get a low-rate personal loan through Personal Money Store, you get your cash immediately with no charges up front and no collateral. You can choose to get a traditional payday loan, which you will pay back all at once when you get your next paycheck. At that time, you’ll pay back your lender’s fees as well. Did you know that the lender’s fees on small payday loans, say $100 to $200, are lower than bank overdraft charge fees? Furthermore, payday lenders only charge one-time fees, and banks usually charge $35 for every transaction made after the account is overdrawn.

You can also choose to get your low-rate personal loan in the form of an installment loan. If you need a larger amount of money, up to $1,500, you can pay back your loan with a few payments instead of all at once. Installment loans are great if an essential appliance breaks and other large financial emergencies.

Apply now for your low-rate personal loan

If you just need $100 to tide you over and help you avoid a $35 bank overdraft charge, you’ll save money with a low-rate personal loan. Or, if you need a larger amount of money, check into getting an installment loan. Either way, low-rate personal loans through Personal Money Store can help you save money, get things you need or maintain financial stability, so APPLY NOW!

If you need a Low-Rate Personal Loan, APPLY NOW!

Banks get rich by making me poor

I just can’t stop kicking myself. First, I got slammed with $105 in bank overdraft fees. I am still recovering from it. Then, I came across this story in The Huffington Post that says banks made $24 billion from overdraft fees last year. That’s Billion. With a B. In one year. I feel like such a sucker.

I especially feel like a sucker because I knew all about payday loans. I know how much they cost. I know how quickly they are completed. And now I know that I could have saved a bunch of money if I’d gotten a payday loan in time.

Reputation versus reality

Payday loans have gotten a bad rap. A small, loud group of angry people have convinced a lot of people, including my dad, that payday loans, or unsecured loans or cash advances — whatever you want to call them — are bad. The people who are angry about payday loans are the ones who used them irresponsibly and got hit with late fees.

However, those of us in the know realize that getting a payday loan on purpose and paying it back on time is far less expensive than accidentally overdrawing your bank account. My bank charges $35 for the first transaction that puts me at a negative balance. After that, it charges another $35 for each transaction after that until my account is returned to a positive balance. It doesn’t matter if it’s $5 or 5 cents, I get charged $35. That’s how I ended up losing $105 because I made three small purchases after an automatic payment went through and I didn’t realize my account was drained.

Where I live, the average fee for a $100 payday loan is $15. That’s a one-time fee. It doesn’t matter how many purchases I make with that $100. I could have gotten a $200 payday loan , and it would have cost me less than one bank overdraft charge.

Don’t fall victim to your bank

So everyone is going after the payday loan industry because lenders charge fees if you don’t pay back your loan. But where is the outrage about the ridiculous amount banks charge if you overdraw your account by even a dollar? Given the fact that the banks made $24 billion from overdraft fees in 2008, and they are on target to make $27 billion this year, people are starting to take notice.

The Huffington Post writes that “some banks post debits from the highest amount to the lowest, rather than chronologically, so a $4 purchase at 10 a.m. at Starbucks is posted to the account after a $68 dinner bill that created a negative balance.” That means the customer should have only been charged once, but she or he was charged twice. How messed up is that?

Don’t trust me, trust the numbers

You might still be thinking “I’m not sure if I want to do this.” Well, there is one sure way to figure out whether you are doing the right thing: Do the math. You don’t have to accept the terms of your payday loan until after you already know what your lender’s fees will be.

Simply calculate which will be higher: the payday loan fee or the overdraft charges. Don’t forget to take into account that you’ll get charged the overdraft fee on every purchase you make. You will only be charged your payday loan fee once.

Avoid overdraft charges. Apply for your payday loan HERE

Don't be a victim of pricey bank fees.

The payday cash loan industry is a good example of a situation in which a few bad apples spoiled the whole bunch. Politicians and news media only pay attention when people complain. That means the few borrowers who had a bad experience with payday loans have gotten a lot of attention. No one hears about my friend Luke, who avoided hundreds of dollars in bank fees, or my friend Sara who avoided a $100 NSF fee.

Payday cash loans can be a huge help for people who use them correctly. Payday loan lenders’ fees are less expensive than most bank fees, cheaper than letting your car sit in a tow yard or impound lot. It’s when people borrow more money than they can afford to pay back or don’t plan the timeline of their loans right that trouble happens.

Save money, don’t waste it

Personal Money Store has contact with payday cash lenders all over the country, and we will find the best payday lender for you. Different lenders charge different rates, but the average cost in the U.S. is about $15 per $100. So, if your  bank is going to charge you $35 for every charge when and after you exceed your account balance, you will save money by getting a payday loan.

I used to have a landlord who charged $25 per day for every day that rent was late. Payday cash loans definitely saved me money when my paycheck came a few days after rent was due. If you’ve ever gotten your car towed, you know how much those places charge to get your car back — and the ridiculous amounts they charge for each day you leave it there. These are all good examples of how payday cash loans can save you money. When you don’t have cash just lying around and you get into a bind, payday cash loans can keep it from being worse than it has to be.

Getting an online payday cash loan

Personal Money Store can connect you with a lender who will approve your loan online and electronically transfer your cash into your account. Most lenders will get your cash to you in just a couple of hours. There’s no credit check, so you don’t need to worry about a flawed credit rating standing in the way of you getting the help you need.

Your lender will charge a one-time fee that’s due when your payday loan is due. Payday cash loans generally have terms of about two weeks, so be careful when you set the date to pay back your loan. It’s very important that you have enough cash to pay off your full loan and your lender’s fees on the due date.

Get your payday cash loan quick

You can apply right now for a payday cash loan and get approved in just a few minutes. Don’t let any more time go by without getting the financial stability you need now.

To start the application process, just fill in your information below and click APPLY NOW.

According to the blog Dollars and Sense, Bank of America has wronged America once more. Perhaps a lineup change is needed. B of A hasn’t been able to hit its way out of a paper bag lately. They’re shelling out multimillions for sports marketing, so their employees must all still have jobs, right? Wrong. Plus, Kenneth Lewis’ black hole is now preying upon the “unbanked” and others who depend upon cash advance loans at times.

The BoA branch in the Dollars and Sense author’s part of town is engaging in open class warfare. The elegant, executive-chic area for big-account investors is conveniently located at street level. If you’re a run-of-the-mill customer, you have to go down a flight of stairs and into a “dingy and low-ceilinged space reminiscent of a welfare office.”

Wait… it gets MUCH better

The author, who is not a Bank of America account holder, went into the nether-regions to cash his paycheck. Despite the fact that the check drew upon a Bank of America account and was made out to the author, the bank required him to pay a $6 fee. To make matters worse, he was required to leave them with a fingerprint – “for security.”

They already charge $3 for out-of-network ATM users. While I don’t agree with it, I can see how they might justify that.

How Bank of American and other megalithic banks can be allowed to nickel-and-dime anyone anymore is beyond me. Alternatives exist. Bank of America is being sued and is losing, all because of their practices. With so many people locked out of mainstream banking and big banks reeling during these difficult economic times, you’d think they’d work a little bit harder to draw customers.

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Banks and credit unions are uncomfortable with this competition

For banks, the competition from payday loans is fierce.

They’re fighting for that market share by offering small short-term loans at annual rates as low as 12 percent. Perhaps they will see the folly in offering such a product at such a rate. It is not financially viable, as no fax payday loan companies have found.

Flip it, flip it

The Times reporter cites the belief held by organizations like the CRL that borrowers trap themselves by using an additional lender to pay off their first faxless payday loan (if rollovers are not available). As shown previously, however, most borrowers pay off their loans on time and use very few loans per year, as the above cited CFSA statistics show.

Yet critics blindly persist

CFSA spokesman Steven Schlein is quoted by the Times reporter as saying

Consumer groups are very effective at using that 3- or 4% of horror stories about people who misused the product and got more loans than they can afford. Most payday borrowers earn $25,000 to $50,000 a year. Why would you have a business model to make loans to people who can’t pay you back?

Critics claim that the profit margins for no faxing payday loan companies is outrageous. But according to a Vanderbilt Law/Oxford University co-study from December 2007 at http://www.economics.ox.ac.uk/members/jeremy.tobacman/papers/profitability.pdf, faxless pay day loan companies turn only about 10 percent profit per year due to the risk the small percentage of delinquent borrowers pose.

Consumers have spoken in favor of payday loans

Consumers look to no fax payday loans for the help they require if cash emergencies threaten. Academic and corporate researchers have shown evidence speaking to the value of the loan product. Even independent corporate analysts like Utendahl Capital Partners‘ Daniel O’Sullivan have admitted that

At the end of the day, there is a need for the product, so it comes down to finding something that makes sense for everybody — something the companies can make money at without putting people into a debt spiral.

Speaking of independent parties, is the Center for Responsible Lending (generally faxless payday loans most vocal critic) a party that is merely concerned for the welfare of consumers? Hardly. As you can see, Martin Eakes, who sits on the board of that organization, is also in charge of Self-Help Credit Union, an organization that was in prime position to steal payday loans customer base in North Carolina once the lenders were ceremoniously banned with their own short-term loan products.

The Federal Reserve Board, Office of Thrift Supervision and National Credit Union Association are at it again, and payday loans are looking better than ever when compared with having to deal with overdraft charges on your checking account.

To recap for those of you who aren’t familiar with the service, “overdraft protection” is when a bank or credit union charges a fee to a customer’s account when they have insufficient or unavailable funds in the account to cover a pending transaction. Not only can this service be very expensive, but frequently customers don’t have the clear option to opt-in or opt-out of the service.

Regarding overdraft services, the Board is proposing two alternative approaches - an opt-out and an opt-in - where the bank must give consumers notice of fees associated with paying overdrafts that occur at ATMs or point of sale debit transactions. Thankfully, there is no such difficulty or near deception with payday loans.

Here’s the opt-out the Fed would like to see

This plan would prohibit banks from charging a consumer’s account for overdraft if the customer is given notice and reasonable opportunity to opt out and does so. This doesn’t free a bank  from paying overdraft, but it does limit or completely eliminate their ability to charge customers for it.

Per the Board, examples of “reasonable opportunity” may include:

• A 30-day period after receiving notice of the right to opt out for the consumer to call or otherwise contact the financial institution;
• A notice signed as a necessary step in account opening of the choice to opt out;

And their opt-in approach

Here, banks are prohibited from charging overdraft fees unless the consumer is provided with notice explaining the institutions overdraft service for such transactions and is given a reasonable opportunity to affirmatively consent or opt-in to the service.  If the consumer opts-in, the financial institution must provide written confirmation of this consent.

Model Forms

As seen in the above links, the Board has produced model forms that financial institutions may provide to consumers in order to attempt to obtain consent regarding overdraft services. These forms reflect a fee for the overdraft service but do not disclose that fee as an annualized percentage rate.

Why is the Board not requiring that APR be listed in bank literature about overdraft services? Perhaps because it would be too embarrassing for banks? Organizations that represent the payday loans industry like the Online Lenders’ Alliance (OLA) attempt to convince the board that if APRs must be published for payday loans per the Truth in Lending Act, banks must follow suit with what amounts to overdraft loans.

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Even though APR is not entirely compatible with payday loans (which are often two-week loans, making full-year interest rates immaterial), lets assume for the sake of argument that 391 percent is accurate.

Next, let’s assume that consumers facing a small financial crisis will rely upon a product like checking overdraft protection once in a great while if their balance is low and an unavoidable expense threatens to overdraw their account. Overdraft protection of this nature is quite common and readily available, in much the same way that no fax payday loans are available for short-term cash problems.

Is Overdraft Protection a More Cost Effective Option Than Payday Loans?

A November 2008 study by the Federal Deposit Insurance Corporation (FDIC) answers that question with a resounding NO. In fact, their study of 1,171 FDIC-supervised banks presents hard data that proves that their overdraft programs are prevalent, often deceptive, generate tremendous revenue and exploitative. Here are some highlights:

Overdraft is prevalent…

• 86 percent offer at least one type of overdraft program

…deceptive…

• 75 percent automatically enroll customers without asking; customers must voluntarily opt out. In some cases, the option to opt out isn’t even available
• 81 percent permitted overdrafts at ATMs and points of sale (POS), and most informed customers of the overdraft only after it occurred (88.8 percent for POS and debit transactions, 70.7 percent for ATMs)

…generates tremendous revenue…

• Median overdraft fee is $27; a $27 fee for a single $60 instance, repaid in two weeks, translates into a 1,173 percent APR
• Banks earned $1.97 billion in NSF fees in 2006, which was 74 percent of all service charges and six percent of net operating revenue
• Banks with overdraft programs had higher NSF-related fee income than other banks
• Customers with 5 or more NSF transactions over the 12-month period of the survey accounted for 93.4 percent of total NSF fees reported
• Customers with up to four NSF charges paid $64 per year on average; those with 20 or more paid $1,610

…and exploits customers

• Approximately one quarter of the banks with automated overdraft protection also assessed additional fees on top of the NSFs for retaining a negative balance
• Accounts held by customers in low-income areas (media household income below $30,000) were more likely to incur overdraft charges than those in higher income areas; more than 38 percent of low-income accounts had at least one NSF fee, compared with 22 percent of upper-income accounts
• Assuming the median $27 overdraft fee, a customer paying a $20 POS/debit overdraft in two weeks would pay an APR of 3,520 percent; a $60 ATM overdraft would be 1,173 percent; a $66 checking overdraft would be 1,067 percent
• If overdraft fees are repaid more quickly, the resulting APR is actually higher
• Accounts held by customers 18 to 25 are much more likely to incur NSF activity (46.4 percent)

Before a consumer relies upon overdraft protection to cover themselves in the event of a short-term financial emergency that can drain their account, they should consider the facts. The expense of this service alone is prohibitive, and banks don’t make it easy to get rid of (or even get rid of in some cases). Payday loans are a safer, less expensive, more convenient option for consumers who wish to escape excessive debt rather than create it.

Ever needed a payday loan to cover overdraft fees or ATM fees that your bank has charged you? If you haven’t, you just might be looking for one sooner than you think. Because of economic turmoil, banks are forecasting that overdraft fees and ATM fees will continue to rise above the average of $34.65 and $1.98, to try and cover losses over bad mortgage loans and poor investments. So what does this mean for you? Hopefully better budgeting and planning.

Paying Interest to Access Your Money

As convenient as an ATM machine is, you should really pick and choose which ones you use. Most banks charge a fee for using competitors’ ATM machines and sometimes that fee can be up to $2.50. If you only take out $20, you’re paying 12.5% interest on your own money. It’s kind of ridiculous, huh?  A payday loan that is paid back on the very next payday has less interest then that. The best way to avoid these fees is to use your bank’s ATM machine or find out which ATM machines are in your bank’s network. Planning ahead can make a world of difference on your bank statement.

Pesky Overdraft Fees

We have all over drafted our accounts for extra money for something at one point or another; it happens. My personal favorite though is when I purchase something at the grocery store after my paycheck has been deposited into my account and because deposits get posted after debits for the day, I get charged an overdraft fee even though the money was in my account before I made the purchase. Banks look for any way possible to charge you a fee to help boost their bottom dollar. What’s even worse is some banks charge an overdraft fee for every purchase over your limit, no matter how small, and then charge you for every day that your account is in the negative.

Where Does It End?

It doesn’t end, plain and simple. Banks will keep raising fees no matter what. The real question is, how much will they rise? Even if your bank is not raising its overdraft fees, you should really look into what fees they are raising. Banks are tacking on fees to savings accounts for too much activity in the account or if you keep a balance over a certain amount. It kind of defeats the purpose of saving emergency funds if you’re going to get charged to do so. Other fees rising include service fees, overdraft protection fees, and bounced check fees for those accounts that do not have overdraft protection. The best thing you can do is get a list of all the fees your bank charges and then ask how each of the fees applies to your account.

Knowing Is Half the Battle

Being responsible about your checking and savings account is the best advice I can give you. Make a budget and pay attention to accounts by balancing your checkbook and watching activity online. Knowing what’s going on with your money at all times is half of the battle with bank fees. Times do get rough though and accidents are bound to happen. If you find yourself in a crunch with the bank, there is always a payday loan around to bail you out.

When was the last time you had an overdraft fee? It’s typically a memorable event that is usually accompanied by some self induced growling and occasional profanity. In short it’s an experience that doesn’t just roll off your back. Most of us will carry it around with us like a bad growth, and some people get payday loans to circumvent it.

Most feel tricked or betrayed when hit by an overdraft charge. Banks have gotten very constructive and even sneaky in there efforts to take advantage of this window of opportunity and they are not making a big effort in helping their clients avoid such situations either.

With the recent mortgage crisis their has been a sharp rise in the cost of banking fees. Many speculate that this is because of the revenue lost due to the increased number of mortgage defaults. Bank fees are at all time highs and getting nailed now can really put the hurt on your finances, and it may just be worth it to look into payday loans instead.

Here are some tips to help you avoid getting struck by overdraft fees.

Balance Your Account Often

Are your banks fees sneaking up on you?

Many of us may not give our bank account an appropriate amount of maintenance. In fact, a large majority will balance there account balance and check book only when they receive their monthly statement. This is indeed a good time to do so, but it should be balanced more than once a month. Loosing track of how much money is remaining in your account is the number one way to get hit by fees for insufficient funds.

At the very least take a few minutes at the end of each week to crunch the numbers and make sure everything balances out. The more often the better but at the very least strive for once a week and always compare the outcome with your monthly bank statement.

Open All Mail From Your Bank

Be sure to open your mail! If you have a habit of just throwing your mail from the bank into a miscellaneous pile on your desk or file them as they are, you may miss an important notice letting you know that your account has hit the red zone. Every check that hits the bank at this point is going to bounce and you are going to accrue an outrageous amount of overdraft charges. Always open you bank mail!.

Also if the mistake happens to be the banks fault, it is better to catch and dispute the problem early as the more fees that hit your account and compound’s the problem, the more difficult and frustrating it may be to sort the problem out.

Also, you must remember that the bank does everything by mail. When you overdraft your account you will not receive a phone call. This means that by the time you have found out about the discrepancy, a couple days may have already passed. Additional overdraft charges may have hit your account already.

Be Cautious of Rising Fees

The Consumer Federation of America (CFA) reported that 80% of our countries largest banks charge their customers high overdraft fees without their permission. It may come as a shock to you that your bank doesn’t need to get your permission to raise fees that will effect your banking experience, but they don’t. They are however, required to notify you by mail, but there is no requirement as to how small the fine print can be.

These notices will usually come with your bank statement. So once again, be sure to read your mail, including the fine print.

The problem that usually arises with rising fees is that the unaware consumer may be getting charged for dipping below a newly set minimum balance limit. These fees if left unrecorded, can eventually catch up with you in a big way as you get closer to zeroing out your account balance.

Another area that may sneak up on you are ATM fees. Usually your banks ATM fees won’t charge you for making a withdrawal but other banks ATM machines can get you into a whole lot of trouble. These charges can be close to four dollars in places. Leaving these fees unrecorded as said before, will eventually catch up to you so you must make sure that you are aware of any and all fees. Your bank is always ready to catch your mistake so be sure that you catch yourself from making them – which payday loans are great for.

I’ve got some for you.

Jonathan Zinman, Assistant Professor of Economics at Dartmouth College, has published a study entitled “Restricting Consumer Credit Access: Household Survey Evidence on Effects Around the Oregon Rate Cap.” His work deals with a representative sample of 400 customers who used quick payday loans taken before and after the rate cap was put in place in Oregon on July 1, 2007.

Results suggest a deterioration in the financial health of Oregon households

By reducing the overall yield for lenders, this regulation drove them out of Oregon. Thus, the issue at hand is whether Oregon families were hurt by the lack of quick payday loans available. Lending figures decreased after the cap was instituted, but another significant story emerged: customers increasingly began to rely upon checking overdraft protection when faced with emergency financial events.

As you may know, overdraft protection is a favorite product of banks and credit unions, as it is frequently a huge revenue generator.

Simply put, customers lose

Here’s what Professor Zinman has to say about his findings:

Like some other studies, these results suggest that access to credit, even if expensive, can help some people make productive investments and help others manage their cash flows through emergencies … there’s more work to do to reconcile these results with findings from other studies that suggest access to expensive credit can exacerbate financial distress.

Overdraft fees are scary. Take at look at what some people have had to deal with, thanks to your friendly neighborhood bank:

Once you look at the data in Zinman’s report, I trust you’ll see that limiting access to quick payday loans is hardly an economic policy solution that helps the people. If nothing else, it drives businesses out of states like Oregon, eliminates scores of jobs and drives customers in the market for short-term loans to less reputable, more expensive options.

Once again, bank ATM and overdraft fees are on the rise. This comes after a survey released last week by Bankrate.com based on information from 249 banks in the nations 25 largest metropolitan areas. The good news however, is that avoiding such fees is easy. “With 24-7 online access to your accounts, there’s really no excuse for losing track of your balance anymore,” said Greg McBride, senior financial analyst with Bankrate. So, the ancient proverb rings true “to whom much is given much is required”.

The survey quotes the average fee for using another banks ATM is now $3.43, up 13 percent from last year. A bounced check costs an average of $28.95, up 2.5 percent from a year ago – more than the fee from the average payday loans lenders.

Why the Higher Fees?

Is your bank nickel and diming you?

The higher fees can be a result of many things. With the recent trouble in our economy many banks may simply be trying to make up lost capital. Others may be rising their fees to hold consumers accountable to their personal finances. With a stressed economy and rising unemployment rates many people are simply falling short financially.

With all the competition between banks to win market share, many have reduced or eliminated many of the set up costs for opening a new account. The number of banks offering free checking has doubled in the past few years. Now we know where the difference is being made up.

Consumer Concerns and Protecting Yourself

Among consumers the most outrage seem to be over overdraft fees. With many banks adopting a tiered structure where each successive overdraft costs more than the previous, which has never been how payday loans work. The cascading effect of making a small discrepancy balancing your checkbook can prove to be more than costly.

The best thing that consumers can do to avoid penalty is to stay on top of their finances. Balancing your checkbook more carefully and more often will help you to catch oversights that you might otherwise miss.

The largest percentage of overdraft fees seems to be from unrecorded debits. If you use a debit card for all your transactions it is imperative that you request and record your receipts. A safer way is to use a credit card for your monthly transactions and than write a check for the full balance at the end of the month. This way you curb the risk of over drafting your account using your debit card as well as providing yourself a monthly ledger of your purchases for quick review.

As a Last Resort

If you find yourself in a position where you have over drafted your account and you still have checks that have yet to hit your bank, you may consider applying for payday loans.  Payday loans would be far less costly than multiple overdrafts. Individuals can apply and be approved for payday loans online. The process is quick and easy and best of all, funds are electronically deposited into your bank account automatically so your funds will be their before your next check hits the bank.

Has the sputtering economy put you in a situation where you’re constantly using bank overdraft protection every month to pay bills? If so, we’d like to hear your story. Please contact reporter Rita Savard at (978) 970-4826, or e-mail rsavard@lowellsun.com

Quoted With Edits From: Is your overdraft on overdrive? (Lowell Sun)

Make a budget and stick with it

It will always be true that the best way to avoid overdraft fees is to make a budget and stick to it. There’s no method that is more foolproof. However, if you do come across a situation where your account is in a dangerous place, you need to consider your options. Short term installment loans are among them.

What will you do?

There are many different ways of looking at this conundrum. What’s sure is that your account balance is about to dip into the red and you need to do something about it. Not only to protect your reputation as a consumer who pays their debts, but to keep little errors like this from taking root like weeds in your credit report. You don’t want to have a black mark on your report when you go to apply for something big, like a mortgage or a car loan, right? Installment loans do not typically require credit checks, so you wouldn’t have that problem there.

Proponents of overdraft protection (typically banks themselves, or those who are directly or indirectly supported by bank funding) will tell you that having such a service tied to your checking account is invaluable. However, much evidence exists that shows how wildly expensive that ends up being on an annual basis.

And that’s just the beginning…

Economists Donald Morgan and Michael Strain prepared a report for the Federal Reserve Bank of New York that pointed out the sky-high danger of relying on overdraft protection. On page six of PDF of their report, they site a study by the Woodstock Institute of overdraft protection. Studies of eight “large Chicago banks estimated that the (implicit) APR for bounced check “protection” averaged 2,400 percent.”

That’s serious financial bloodletting. Wouldn’t you rather use an emergency options like installment loans, where you pay a reasonable percentage rate (typically no larger than 35-40 percent) and even have the option of a convenient installment plan. That’s MUCH less expensive that a 2,400 percent APR, isn’t it?

LONDON (SHARECAST) – Eight high street banks are today turning to the High Court in a bid to overturn a ruling on bank overdraft charges.

Your Cash Advances News Source Quoted With Edits From: Banks challenge OFT overdraft ruling (Sharecast)

When Irresponsibility Bites Back

There’s nothing worse than getting a unexpected letter in the mail from your personal bank. First you suspect another credit card offer but not seeing the familiar APR printed boldly on the outside of the blank envelope, you know it’s about to get personal. Sure enough, as you open the letter you find that somewhere along the way you made a mistake in the balancing of your check book. For me personally, not that it happens to often, it’s the debit card that gets me into trouble. I simply forget to write things down sometimes and then I end up needing cash advances to cover the fees.

The True Cost of a Small Mistake

The real crux of the issue is that by the time you find out that you have over drafted your account, your account has been hit more than one time. I once had over 300 dollars in overdraft charges for a small handful of checks that I wrote for minuscule amounts. Although the totals of the checks that were written after the funds were found to be insufficient, were very small,  the overdraft fees are the same per check. My smallest charge was for a Snickers candy bar at 60 cents, but because my account was overdrawn, the cost to me was 60 cents plus the overdraft fee of $30. The total: $30.60, Ouch! At least their good!

This is a hard hit to take and when you find yourself in this situation it is easy to get in an uproar but ultimately it was a result of personal error, or lack of responsibility on my part.

Should the Overdraft Ruling be Challenged?

Writing small checks can lead to huge overdraft fees

This raises questions in my mind in regards to the proposed overdraft ruling. My bank made it very known to me upon opening a checking account, what the consequences would be of over drafting it. They strongly advised against it and explained to me the consequences that were set in place.

So in all fairness, even with my distaste for overdraft fees, I don’t think the banks should be challenged on their overdraft fees as they are set in place to keep their clients from making these types of mistakes. I myself would be more cautious were the fees more than they are now.

The fact is, we all get to choose the bank that we want to do business with, this by itself will help regulate these fees as the competition among banks for market share is fierce. If customers aren’t pleased with the practices and or policies of their personal banks than they will move to another.

If you have been struck by pesky overdraft fees and need quick cash to cover the costs, you can apply for cash advances with Personal Money Store.

Some Lloyds TSB customers mistakenly receive letters claiming they had gone overdrawn and would be charged.

Your Payday Loans News Source Quoted With Edits From: Lloyds TSB admits overdraft error (BBC News)

“Technical Error” concerns

An overdraft fee is the last thing that will help repair credit. Fortunately, for Lloyds TSB customers, the overdraft notices they received in the mail were sent out accidentally due to a “technical error.” I know if I were a customer, an overdraft notice would cause many concerns for me. First of all, before discovering that it was an error, I would be outraged that I did something to overdraft my account. Secondly, I would have less faith in my bank, and it’s important to have trust in your bank when the world economy is struggling like it is. I don’t want to have to worry about my bank going under or needing payday loans to correct overdraft fee mistakes.

Will Payday Loans help You Repair Your Credit?

Give Them a Break

On the other hand, the banks could probably use a little forgiveness. I can’t tell you how many times my computer at home or work malfunctions, so it’s not inconceivable that bank computers can do the same. The information banks possess is much more important than what I’ve got on my computer, but it’s understandable that banks are going to face computer problems every once in awhile.

Fair or Unfair?

Back to the issue on hand, Lloyds TSB is one bank among many that is trying to decide whether or not overdraft fees are fair. There are individuals who are careless with their money and recklessly spend money they don’t have, which overdraws their account. However, there are also instances when a person can unknowingly overdraft their account, which won’t help repair credit. Overdraft fees aren’t fair, but at the same time, if there were no penalties people would constantly overdraft their account.