Cosmetic surgery procedures are increasing as the economy improves, with breast augmentation leading the way. Image:; CC Tomas Fano/Flickr

Cosmetic surgery has emerged as a key economic indicator. As the economy grows, so does the rate of breast augmentations, tummy tucks and nose jobs. An industry report released Thursday said elective cosmetic surgery procedures were up 5 percent in 2010, the first increase since the recession began.

Business booming for cosmetic surgeons

The U.S. economic recovery is gathering steam, according to the American Society of Plastic Surgeons. As other key economic indicators such as Gross Domestic Product and consumer confidence inch upward, so has the number of nips and tucks. ASPS recorded 13.1 million cosmetic surgery procedures in 2010, a 5 percent increase from 2009. Cosmetic surgeons are excited over the news, but the recession didn’t exactly put them in the poorhouse. From 2008 through 2009, spending on cosmetic surgery passed $10 billion even though it dropped 3 percent. However, the uptick in elective surgeries has investors hopeful that the American custom to borrow money for big-ticket items is on the rebound.

Spending on cosmetic surgery

Breast augmentation was the most popular cosmetic surgery in 2010. Nearly 300,000 women put anywhere from $4,000 to $10,000 on their credit cards for the procedure. Nose jobs came in a close second at more than 250,000 procedures costing between $3,000 and $8,000, depending on the scope of work. About 209,000 eyelid surgeries were performed costing an average of $4,100. Liposuctions costing up to $7,500 (203,000) and tummy tucks running about $8,500 (116,000) also increased. Face lifts took a beating during the recession but rose 9 percent in 2010 with approximately 113,000 procedures costing from $6,000 to $15,000.

Consumers draw the line on Botox injections

Cosmetic surgeons are no doubt pleased that Botox appears to be recession-proof. After holding steady in the downturn, Botox injections also increased by 5 percent in 2010. Botulinum toxin type A was the most in-demand Botox injection with 5. 4 million procedures in 2010. Americans may be willing to pass on bigger breasts and smaller noses during hard times, but giving up a $500 Botox injection twice a year is apparently out of the question.

Sources

ABC News

MSNBC

U.S. News and World Report

To find cheap airline tickets, plan ahead, buy early, check weekly airfare pricing trends and take advantage of technology. Image: lemoncat1/Flickr

To find cheap airline tickets, it’s best to study airfare pricing trends, do your homework and remain vigilant. Airlines offer a certain percentage of seats at a discount to fill planes, but they don’t want to make it too easy. Because airfares are in a constant state of flux, finding cheap airline tickets takes timing and a little bit of luck.

Finding the cheapest airfares is a challenge

Airlines can change ticket prices several times a day. To know when the cheapest airfares are available, it’s best to sign up for e-mail alerts on travel web sites that track constantly changing airfares. Some travel web sites also help you to stay informed about airfare pricing trends, fees and surcharges. The earlier you purchase airfares, the better. Having that flexibility expands your options, especially if you want to borrow money with a short term loan to take advantage of savings on a dream vacation. Airlines start marketing the cheapest airfares about four months ahead. Planning ahead also helps you identify trends to determine when the cheapest airfares are available.

Airfare pricing trends

When you can’t plan ahead, savvy travelers say the cheapest day to buy airline tickets is Wednesday. Airfare pricing typically goes through a one-week cycle. Most sales, in which seats can be discounted up to 25 percent, begin Monday night. A discount carrier such as AirTran will offer a deal, and its competitors will match the price. Airlines often try to bump up airfares across the board on Thursday night. Such behavior makes Wednesday from midnight to 1 a.m., in the time zone of the airline’s home base, a good time to buy. That’s when airlines dump reserved low-fare reservations that aren’t booked. Get online late at night to snap up these opportunities because they go fast.

Going, going, gone …

The weekly airfare cycle is a relic of the time when airlines advertised daily sales in the newspaper and travel agencies sold tickets Monday through Friday. Sales launched early in the week gave time for the word to get out. Sales launched at the end of the week didn’t get noticed. The pattern still holds, even though the Internet lets airlines sell their own fares and screaming deals can pop up in Twitter tweets on smartphones anytime. It won’t be long before airfare prices are unpredictable. Ultimately, to find the cheapest airfares, you need technology on your side.

Sources

MarketWatch

ABC News

Seeking Alpha

Avoid the hassle with a quick loan by phone

Applying for a loan by phone can save you time and money. The process is simple, and there are typically no credit checks or faxing of any documents required. Using your smartphone, iPhone or any other wireless device with Internet access, you can complete the online application form in just a few short minutes. The moment you submit your application we’ll go right to work to pair you with the best-matching lender within our network.

Our wide network of online lenders

Personal Money Market’s wide network of lenders is dedicated to helping people like you get the cash they need, no matter what your situation may be. Most of our lenders require no credit check, so even if you have bad, poor or no credit at all, we can help find the best lender that’s right for you. Once approved, your lender can have your funds sent straight to your bank account, available to use in as little as two hours.

Take action and save money, time

The ability to apply for a quick loan by phone comes with many benefits. But the best advantage, by far, is it allows you to save money and valuable time. Everyone knows that financial dilemmas can arise at any time without warning, and taking too long to deal with those small money problems can result in more money loss and time wasted. So, if all you need is just a little help to get by, take action right now and get the help you need the fastest, easiest way possible.

Apply for a loan by phone | Start your online application HERE

People can bypass the bank completely with a peer to peer loan lender. Image from Wikimedia Commons.

Someone who needs to get a loan but doesn’t want to go to a bank can look into peer to peer loan lenders. With peer to peer lending, people who want to borrow money are put in touch with people who have capital. It is becoming a booming business.

Peer to peer loan lenders cut out the middleman

Those looking to get a personal loan for whatever reason — be it for home improvement or for debt consolidation — don’t always have to go to traditional loan lenders like banks. There’s a new service called peer to peer lending that become popular in the last few years. Peer to peer lending is fairly simple. A person interested in borrowing money goes to a website and applies to get a loan. If the service accepts the applicant, then the person who applied may get offered a loan by any party that has money to lend. Then the applicant can decide to accept or decline the loan that’s offered. The funding comes from investors, which is how a lot of banks get lending capital. It also has returns for investors equal to or better than the stock market, according to Forbes.

Services differ

There are numerous peer to peer lending services, and there can be differing manners in which the loan is offered. For instance, investors can pledge money together in a loan bundle. On the peer to peer service Prosper, lenders or investors can make competing offers to loan applicants. Interest rates and terms can vary, so it isn’t guaranteed people will get loan offers they want.

That does not mean easy money

Most of these services are as discerning as banks and won’t accept an applicant with a credit score in the tank. However, interest rates can often be a lot lower than an installment loan from mainstream financial institution like a bank or finance company.

Sources

Forbes

The interest deduction from mortgage payments may not give much instant cash to the homeowners who can use it. Image from Wikimedia Commons.

A lot of homeowners can try to get a bit of extra cash by taking tax deductions for interest paid on mortgage loans. However, it’s been suggested that tax breaks on mortgage interest are a waste. Fewer people are applying for personal loans for homes these days.

Homeowner tax credit under fire

A recent post on CNN Fortune by Nin-Hai Tseng suggested that the tax break offered to homeowners for interest on mortgage payments doesn’t actually benefit the people that could really use the instant cash. The argument is that a homeowner has to itemize deductions to receive the tax break and because usually only wealthy people actually do that, the tax break benefits fewer people than thought. Also, because the interest deduction has no effect on actual home prices, it doesn’t do much for the housing market. Since the costs of homeownership are so high, and a person is never likely to gain full equity, maybe putting more payday cash into savings instead of real estate isn’t a bad idea.

Fewer buying houses

The number of people getting an installment loan or personal loan for a home is dwindling, according to USA Today. For the month of October, home sales saw a drop of more than 2 percent. Granted, a drop of less than 3 percent is hardly time to start panicking or declare a depression, but October of 2010 had 38.5 percent fewer sales than October of 2005. Fewer people are willing to borrow money because of conditions or inability to because of lending standards.  The housing market still has a long way to go before it has recovered from the downturn of the last few years.

American dream getting further from reality

Many of the components of the American Dream, like owning a home, getting a good education and so forth, are all getting further out of reach for many Americans. However, there is reason for hope. Most signs are pointing to growth, just at a slower pace than hoped.

Sources

CNN

USA Today

Getting a personal loan for the holidays from a bank may be tough, but there are other ways to borrow the money you need. Image: CC NC Brian/Flickr

Personal loans customarily gain popularity during the holiday season. A personal loan for the holidays may be more difficult to secure this year than in the past, depending on your credit score. Interest rates are low, which is less of an incentive for banks, which are currently hoarding reserves, to lend.

Why personal loans may be harder to get

It may be more difficult to get a personal loan for the holidays because banks can borrow money from the Federal Reserve at interest rates approaching zero. Instead of risking default by granting personal loans, installment loans, mortgage loans and other forms of lending, banks are using that money to invest for profit. A prime example of this is the massive purchase of U.S. Treasury bonds by banks in 2010. Banks have purchased $127 billion in Treasurys since the second quarter, while loans have decreased by $68.5 billion. In essence, banks can borrow money from the Fed at near zero interest, then loan it back to the Fed at a much higher rate in the form of Treasury purchases.

What to expect when you look for a personal loan

The reluctance of banks to grant personal loans for the holidays means that only those with very strong credit scores can expect success — from banks, that is. The average interest rate on personal loans with a decent credit score is 12 to 18 percent. But if your credit is less that stellar these days, it doesn’t hurt to start with the bank or credit union where you put your money. An established relationship may improve your chances. If that doesn’t work, numerous lenders offer personal loans online. However, a lower credit score could result in interest rates as high as 20 percent.

A holiday loan alternative

An interesting alternative to those high interest rates on a personal loan may be peer-to-peer lending. Peer-to-peer lending takes the bank acting as middleman out of the equation. On peer-to-peer lending websites, consumers lend money to each other. On some peer-to-peer lending sites lenders bid to offer borrowers lower interest rates. Lenders choose who they lend to and make loans from as little as $25 up to $25,000. Getting a personal loan for the holidays from a fellow consumer could land a competitive interest rate without a perfect credit score.

Sources

Credit Loan

Forbes

Subprime Blogger

A holiday loan can keep you in shape financially. (Photo: adjustafresh/Flickr/CC BY-ND)

Christmastime is quickly approaching, and you’re here for a very good reason: You need help with your holiday needs. Fortunately, finding the best holiday cash loans is easy, especially with match-making lending sites like Personal Money Market. In just a few short minutes, you can get back on your way to celebrating the holidays like you’re supposed to.

Holiday cash loans can save you money

The holidays can be extremely harsh on a budget, and a holiday cash loan can help you stay firmly on your feet when life’s unforeseen troubles head your way. If you need to pay off an unexpected bill or you’re simply looking to take advantage of all the holiday saving opportunities, you don’t have to wait another two weeks for your next paycheck. Waiting too long could result in more late/penalty charges and missed opportunities to save big money this season.

Easily borrow money for the holidays

Of course, you can always ask a close friend or family member to borrow money, but most likely, especially around this time of the year, they too may be running low on cash. Then there are the banks who tend to make the borrowing process a grand ordeal. Getting a bank loan can take days, if not weeks. If you need money now to pay of bills before more charges accrue, you don’t want to wait days on end just to find out you are being denied of the help you need. If saving time and more money is what you’re after, apply today for holiday cash loans online. They’re fast, easy and convenient.

Fast holiday cash loans online

Don’t rely on Santa for all your holiday needs. Apply for a holiday cash loan today and take care of short term money problems as quickly as they come. The application process is fast, and you typically won’t have to worry about faxing in extensive paperwork or submit to another credit check. Avoid holiday stress and apply today, online or over the phone.

Holiday Cash Loans Online | Start your application HERE

Holiday loans can see you through this season. (Photo: Lee Burton/Flickr/CC BY-SA)

A fast holiday loan can help in many ways. If you’re like most people during this time of the year, you are in need of some extra cash. Among many reasons, you may need the money to pay off unexpected bills or take advantage of unbeatable holiday store prices. But where can a person go to find this type of quick financing? Thankfully, with places like Personal Money Market, getting a holiday loan for your holiday needs is fast and easy.

How to get a holiday loan online

The fastest way to obtain a no-hassle holiday loan is to apply for it directly online. Here we make getting the help you need an experience like no other. In minutes, you can complete the online loan application and get an answer in no time. Everything is done online, meaning you typically won’t have to deal with extensive paperwork or faxing of any documents. The entire process is fast, so there is no waiting or wondering. Help is just a click of a mouse away.

To get started, begin the short application below.

Using a holiday loan the right way

A holiday loan, along with many other forms of short term credit, must always be used with utmost care. If you need to borrow money specifically for holiday-related materials, before anything else, design a game plan that will help save you money. Come up with a budget sheet of everything you plan on buying and how much you can reasonably afford. If you come up short on cash, a holiday loan can help cover the costs. Just make sure every penny is well worth it.

Consider your real needs

Remember, the holidays are not all about giving gifts and spending huge amounts money. It’s about celebrating all the things you are thankful for, such as your loving friends and family. You don’t need a holiday loan to enjoy the simple things in life. So analyze what your real needs are, and have a happy holiday this season.

Apply today for a holiday loan | Start HERE

Google is granting a 10 percent raise to all 23,331 employees for 2011 as an incentive to stick around. Image: CC Rojer/Flickr

A Google raise of 10 percent for all its employees was announced last week. In addition to the raise, Google is giving its entire staff a $1,000 Christmas bonus. Tech insiders say the Google raise and bonus is an attempt to fight off employee defections to Google rivals such as Facebook.

Google’s $1-billion raise

The Google raise, effective Jan. 1, 2011, has been offered across the board to every one of the company’s 23,331 employees. Google is even paying the taxes on the $1,000 holiday bonus so employees can take home a nice round number. According to Business Insider, the raises could cost the company $1 billion a year. The holiday bonus of $1,000 will cost Google about $20 million. Fortunately, those of us who don’t work for Google can get quick cash for Christmas easily with a payday loan or personal installment loan online.

Google captains jumping ship

The Google raise is a response from the company to fight off a talent drain as rapidly growing rivals aggressively approach top Google employees. But in an ironic twist, the Google employee who leaked news about the raise was fired and may have to borrow money for the holidays. Getting fired for releasing information that prospective Google employees should probably know seems counter-intuitive for a company losing top talent. CNN reports that in the past few weeks, Google lost such top guns as YouTube co-founder Chad Hurley, AdMob co-founder Omar Hamoui and Google Maps and Wave creator Lars Rasmussen.

Facebook plunders Google

Facebook has been the biggest raider among those companies seeking talent trained at Google. Mark Zuckerberg’s right hand woman at Facebook is Sheryl Sandberg, former chief of sales and operations at Google. Bret Taylor, Facebook’s chief technology officer, was a top product manager at Google. On LinkedIn — which is also competing with Google for talent — 300 of the 1,900 Facebook employees profiled on the site list Google as a past employer on their resumes. That’s about 15 percent of Facebook’s staff of about 2,000.

Sources

Business Insider

CNNMoney.com

bNET

A person needs a payday to get a payday loan. Image from Wikimedia Commons.

The idea that payday loan lenders want to loan to anyone and everyone to get them hooked is ridiculous. Critics of the industry like to make claims about an awful debt trap and of predatory lending. The story goes that anyone with a pulse can get a loan of they ask. It isn’t true, and if any loan lender did business that way it would soon be out of business.

Pay day is the operative phrase in payday loan

A person has to have upcoming payday cash to get a payday loan. It’s as if the phrase “payday” somehow goes unnoticed, and that is not exactly the best way to build an argument. In order to get a payday advance, a person needs an upcoming payday; it is that simple. There are some glaring contradictions to claims about payday loan lenders, first being that they will let anyone borrow money, regardless of ability to repay. Nothing could be further from the truth. Not only do lenders pay strict attention to ability to repay, but if they ignored it they would soon be bankrupt and looking for a loan until payday themselves.

Ability to repay is the first criterion

The absolute first criterion among payday loan lenders for loaning money to someone is whether they can pay the loan back. Not only that, but the size of a loan is often pegged to income. The claim that lenders disregard income level and just loan to everyone is preposterous. Study of the payday loan industry reveals that profit margins are incredibly tight, leaving little room for error. One study found that a lender has to successfully lend and fully collect six loans to come up with enough money to lend one single small loan.

Only one industry was able to disregard income

There was only one industry that was able to disregard ability to repay, at least for awhile. Pressure on Congress got banks pressured into lending mortgages to people that couldn’t afford them, which led the subprime mortgage crisis, as risky mortgages had to be insured against. You can read more in the Payday Loan Facts and Statistics Report on Personal Money Market.

Some contend that if you borrow short term loans, you'll be bankrupt and homeless soon after. No such correlation exists. Image from Wikimedia Commons.

Small short term loans like payday loans don’t cause bankruptcy. It’s been asserted by some that short term loans do. However, there has not been confirmation for that. Usually, for people to file for bankruptcy, they need to have debts of more than a few hundred dollars. The number of short term loan borrowers that file for bankruptcy is insignificant.

Short term loans actually prevent bankruptcy

Critics of payday loan and short term loan lenders contend that people will get sucked into a spiral of debt and be bankrupt within months if they so much as cast their eyes at a payday loan store. If that were true, no one would borrow them. Not only that, but a wealth of evidence would point to it, like bankruptcy filings. Serious study of the cash advance industry indicated that the correlation between borrowing money from a lender and bankruptcy was incredibly thin. In fact, according to CBS, a 2009 study by the American Journal of Medicine, six out of every 10 bankruptcies were due to medical expenses.

Link is thin at best

One study found that there was a slight correlation between payday customers in Texas and bankruptcy filings, although the number of payday customers who filed for bankruptcy in the study was less than 2 percent of those studied. A study conducted after the bans on payday loans were enacted in Georgia and Oregon found that more filings for Chapter 7 bankruptcy were observed in areas where payday lending was banned.

Extraordinary claims need proof

Because most studies of the demand for short term loans have found that unexpected expenses were the most common reason for borrowing, it is not likely that payday loans have much, if any, effect on personal bankruptcy. You can read more in the Payday Loan Facts and Statistics Report on Personal Money Market.

Intrafamily lending can be a safer investment with a higher return than many investment options currently available. Image: Thinkstock

Intrafamily lending is gaining in popularity as credit remains tight and interest rates are at historic lows. When parents lend money to their children for a mortgage, it can create a win-win situation. Children can get their mortgage, auto or college loan at a better rate and parents can get a better return than most traditional investments.

Why intrafamily lending can be a good option

Intrafamily loans can be a good investment option for parents who have enough money to feel comfortable about making the loan, according to financial planners. Intrafamily loans can be a safe investment and earn a much higher return than certificates of deposit, treasurys or corporate bonds. But parents should only make intrafamily loans if their children are able to be approved by a commercial lender. Intrafamily loans can bring higher returns than double-A corporate bonds at 4 percent. A triple-A bond brings about 3 percent. The national average for CD’s is 0.61 percent.

What can go wrong with intrafamily loans

Lending to family members or friends is generally regarded as a bad idea. Financial planners also warn that intrafamily loans can ruin relationships, disrupt financial stability and bring down the wrath of the IRS. Children who borrow money from their parents can feel as if they have lost control over their lives that they gained by leaving home. Parents lending money to children can be burned by missed payments or default. The best thing to do is write a contract. Templates for promissory notes and other legal documents are available from numerous sources online.

Tax implications for intrafamily lending

It’s important to know that intrafamily loans come with certain tax obligations. Even if an intrafamily loan is interest-free, the IRS requires the lender to pay tax on a certain amount of interest. To keep the IRS at bay, parents need to charge interest rates the IRS sets monthly for short term loans. If the intrafamily loan is for a mortgage, hiring an attorney to register the contract with the government allows the borrower a legal tax deduction on annual interest payments.

Sources

New York Times

MSN Money

NC Estate Planning

What is a no-teletrack cash advance?

A no-teletrack cash advance is a short term cash advance offered to consumers in need of quick financing. Most loan lenders do not check the financial backgrounds of their borrowers to qualify them for this type of money loan. Teletrack is a digital system in which some lenders analyze credit histories of potential borrowers, and with these loans that system is not used.

How much money can I get from this cash advance?

Anywhere from $100 to $1,500 are the standard amounts that most people get applying for a cash advance. You may be able to receive more than this, but you will have to contact the loan company directly.

How long will it take to have my application reviewed?

Your loan application will only take a few minutes to process. If approved, a message should be displayed on your screen, so be sure not to close out of the browser.

How can I get this loan?

Below this article you will see a short form where you can begin filling in your information to get a no-teletrack cash advance. This form will take you just a couple of minutes to complete.

Will my information be protected if I submit it online?

Yes. Your information is safe with a no-teletrack cash advance website like Personal Money Market. These sites protect your information with contemporary site security features. One of these features is the “https” site security. You can find it at the beginning of the URL, in the address bar of a secured page.

If you need cash today the fastest and easiest way possible, begin your application right now.

Apply for a no-teletrack cash advance | Start HERE

A credit card ban would be more beneficial than a payday loan ban. Image from Wikimedia Commons.

More than one social crusader has called for a payday loan ban. They paint a scenario in which people get hooked into a horrible loan until payday because they are desperate. Then an awful spiral of debt begins, and eventually the person is left penniless. The problem is that the reason a person had to borrow money in the first place is never addressed. If people were that concerned with burdens on the middle class, a ban on credit cards would be better.

A payday loan is borrowed for a reason

No one gets a payday loan for fun. The decision is never arbitrary. That supply and demand are involved often is left out of arguments over payday lending. A person needs to borrow money, so that person goes to a payday loan lender. The most common reason, according to most studies, is an unexpected expense that has to be covered. A power bill needs to get paid or a payment made on time, and a person can’t cover it. Some wonder whether a person would be better off using a cash advance from their credit cards instead of borrowing money from a payday lender.

Credit usage among payday borrowers

People who borrow payday loans often use other forms of credit as well. A 2009 study of payday loan demand showed 91.6 percent of payday customers used other forms of credit. Borrowers are also found to have income ranges normally between$25,000 to $49,000 per year. People in the middle class, in this age of stagnating wages, often have to rely on credit cards to maintain their lifestyles. Minimum credit card payments can lock a person in for decades without touching the principle on a card.

Why credit cards are less frequent targets

One of the principle differences between the credit card industry and the payday loan industry is that credit cards are seen as an “institution.” Many people have the idea that an institution is good just because it is an institution. That is rarely the case, and a lot of people wouldn’t need a loan until payday if they hadn’t already been stretched thin by credit card payments. You can read more in the Payday Loan Facts and Statistics Report on Personal Money Market.

Banks and credit unions don't offer a loan until payday like a payday loan lender, because they can't. Image from Wikimedia Commons.

There is a good reason a traditional bank or credit union doesn’t offer a loan until payday to customers. Many people have wondered why it is that a small loan for a short period of time is solely the province of payday lenders. Banks and credit unions steer clear of the practice. There are good reasons why payday loans will never be offered by traditional institutions.

Typical institutions do not offer a loan until payday

A lot of people have observed that while you can visit any payday loan store for a loan until payday, a similar loan is not available at a bank or credit union. It turns out there are some very good reasons for that. Firstly, banks and credit unions have to shield themselves against risk. Most people who use payday loans when they need to borrow money do repay them, but the limited documentation needed is less than the average bank or credit union is willing to accept. Part of bank underwriting criteria is normally to perform a check of credit scores, which a person who needs quick cash doesn’t have the time to wait for.

Studies prove they can’t

Banks and credit unions cannot afford to offer a loan until payday, the way a cash advance or payday loan lender does. It isn’t profitable enough for them, and a bank’s first priority is usually the shareholders. A study by Victor Stango revealed that not only were credit unions not able to offer lower prices on payday products and break even or profit, they were also hampered by not having hours or locations as convenient as payday lenders. The same study revealed only 6 percent of National Credit Union Association members offered a similar product.

Reformers should not hold their breath

It is not likely that banks or credit unions will offer a loan until payday anytime soon. They have status as institutions, which leads many to think they are safe. However, the credit cards and overdraft policies many have makes them anything but. You can read more in the Payday Loan Facts and Statistics Report on Personal Money Market.

As working class Americans have seen their wages stagnate, they are faced with problems much bigger than payday loans. Image from Wikimedia Commons.

Some claim payday loans and the ensuing debt trap are a huge obstacle to the middle and low income classes. The evidence for that claim doesn’t really hold up. In fact, it distracts from the problems facing working Americans. A person will only get a cash advance if it’s needed. Furthermore, there are reasons why a loan until payday actually helps more people than ever.

Wages and costs are bigger problems than payday loans

Numerous studies on the demand for and use of payday loans point to usually one factor that explains why anyone goes to borrow money from a payday loan lender: unexpected expenses. For example, if a water heater quits or a tire picks up a nail, the cost is more than a person can cover between the time that it happens and next pay day. There are multiple reasons fewer people are able to meet these expenses. First of all, overall wages have been stagnant for a long time. However, living costs are going up, especially for health care. In fact, health care costs are the cause of 60 percent of personal bankruptcies.

Wage stagnation

A decrease in wages during a recession is to be expected. The labor market has been depressed since 2008 but has held at about 9.5 percent unemployment. That said, wages have actually been falling since 2000, according to ABC. According to a report by the White House Council of Economic Advisers, wage stagnation in that time period is partially linked to an increase in cost of health insurance. Stagnating wages, combined with inflation, is a recipe for middle class disaster. Considering how many more people are out of work and have had their homes foreclosed, the problem may be getting worse. Payday loan lending is the least of middle class problems.

At a disadvantage

The middle class is at a disadvantage of epic proportions. As early as 2005, it was found that 10 percent of the nation held 70 percent of the wealth. The lack of wealth creating opportunities is a far more dangerous problem than any small dollar loan product. You can read more in the Payday Loan Facts and Statistics Report on Personal Money Market.

Payday loans have clearer terms than credit cards. Image from Wikimedia Commons.

Stereotypes exist about many things, including lenders and borrowers of payday loans. A lot of people have the idea that the people who borrow money from such lenders don’t know what they are getting into. Allegations are often made of undisclosed terms and deceptive advertising. However, like most stereotypes, they aren’t reflected in reality.

Terms of payday loans must be disclosed

Any loan lender, including a lender of payday loans, has to disclose the terms of the loan up front. It is mandated by a law called the Truth In Lending Act, which was passed in 1968. In fact, if a person walks into any garden variety payday loan store, chances are that the rates, fees and terms will be displayed prominently in the lobby. The trade groups that payday loan and cash advance lenders belong to all have a code of standards referred to as “Best Practices.” Those standards include disclosing all terms up front and full compliance with the Truth In Lending Act. These Best Practices are mandated by the Community Financial Services Association of America, the Online Lenders Alliance and the Financial Service Centers of America.

Studies disprove stereotypes

Not only do terms have to be disclosed, but studies indicate that payday loan customers knew exactly what they were doing. Even as early as 2001, studies of short term loan customers revealed that the stereotypes didn’t hold up. One study found that of the payday loan store customers surveyed, 95.7 percent knew what the finance charges on their loans were. Of those same customers,  78 percent remembered receiving disclosure of the APR. A person can’t be fooled by what they actually know.

Hysterical claims never hold up

Though social crusaders often mean well enough, the facts can sometimes be omitted to make people out to be victims for the sake of being sensational. The hype often doesn’t live up to reality. You can read more in the Payday Loan Facts and Statistics Report on Personal Money Market.

To keep people safe from real gangsters, it's best to keep loan credit like payday loans legal. Image from Wikimedia Commons.

Loan credit that is considered subprime is something that will always exist. The mortgage crisis over the last few years brought the term “subprime” into the national lexicon, and it applies to borrowing money from a loan lender without the credit scores that a top notch, or prime, lender would lend to. Bad credit loans come in many forms, such as a payday loan, a home loan or a car loan.

Loan credit did not always depend on scores

Loan credit, or credit of some sort, has existed for a lot longer than the current system of finance. Often enough, what was needed to secure credit was the promise of a future pay day. For instance, the organization that later became Bank of America gained great success by offering quick and easy loans, secured only by a promise to repay, after the 1906 earthquake and subsequent fire that ravaged San Francisco. Credit cards didn’t exist until the latter half of the 20th century, but people still occasionally needed a loan until payday.

Real loan sharks

Today, people who have stable income and a bank account can get a payday loan if they need one. As long as a person is responsible when he or she borrows money from payday loan lenders, there is no danger. However, prior to the early 20th century, it was a different story. Back then, if people needed money, they had to go to an underground lender, or “salary buyer.” Essentially, a person would borrow a portion of his next paycheck, which had to be turned over to the salary buyer. However, salary buyers could charge whatever they wanted and extract payment any way they wanted.

Supply and demand are real

As result of public outrage at underground lenders like “salary buyers,” states passed small loan laws, which raised usury rates. That way, people could have a supply for demands that were met legally and safely. Banning payday loans will keep real loan sharks in business. You can read more in the Payday Loan Facts and Statistics report on Personal Money Market.

Payday lenders do not move into a poor area to turn it into a dust bowl. The truth about payday loan borrowers is actually surprising. Image from Wikimedia Commons.

The actual people that are payday loan borrowers are not who some claim them to be. Payday loan lenders are thought to target the most desperate and poor. Cash advance lenders are also said to concentrate in areas that are more densely populated by minorities. Like most stereotypes, the larger picture is actually a little more complex. Like most stereotypes, there isn’t a lot of truth in these views either.

The poorest of the poor cannot get a payday loan

The thing about the people who actually do borrow money from payday lenders, be it from a payday loan store or online payday loan lender, is that they are not the poorest and most desperate. First of all, one has to have a coming pay day to even be considered for a payday loan. One also has to have a checking account. Now, when it comes to banking, there are two designated people that don’t use a bank for every need. There are the “unbanked,” and the “under banked.” The FDIC and the Federal Reserve define the “under banked” as people who have a transaction account (e.g. checking or savings accounts) but still utilize alternative financial services (AFS) in order to obtain the products they need.

Proof of income is required

By definition, only the under banked can even get access to a payday advance. That means a person has to have a stable income. The unbanked, who are the poorest and most desperate, can’t get a payday loan if they tried. Furthermore, it is economics, not ethnicity, that determines where payday lenders locate. Studies have found that payday lender concentration correlated better to urban and rural areas where most of the population was younger than 40 and lived above the poverty level.

Stereotypes never live up to reality

The average payday loan borrower has a high school education or better, and makes between $25,000 and $50,000 per year. That is middle class, through and through. Considering how easily minimum payments and accumulating interest can trap a person for years, credit cards are far worse for that demographic. You can read more in the Payday Loan Facts and Statistics Report on Personal Money Market.

Mortgages are far more a debt trap than a payday loan could ever be. Image from Wikimedia Commons.

It is almost impossible to prove that such a thing exists as a payday loan debt trap. Like many social issues, the truth is a lot more complex than many would like to admit. For instance, it is true that a lot of people who borrow money from payday lenders take out multiple loans. However, it has not ever been proven that people are taking out new loans to cover their old ones, which is called a rollover.

The debt trap myth

The contention that payday loans trap a person into an endless cycle of debt has never been proved. However, a 2005 study found that many payday borrowers indeed did borrow money multiple times per year. One study found that 29.6 percent of payday borrowers surveyed had 14 or more loans in the previous calendar year and 9.9 percent took out two or fewer, but 28.1 percent had no renewals or rollovers. However, no study has ever ascertained why chronic borrowers, less than half of all payday loan store customers, borrow money with such frequency.

Lender of last resort

The reason why payday loan lenders exist is that they will loan to people that no other loan lender is willing to take a chance on. All a payday lender looks for is the ability to repay, not credit scores. The reason why people go to payday lenders is that they have nowhere else to turn to. A 2009 study of payday loan demand shows the number of people who borrow from multiple sources of credit is 91.6 percent. Johnathan Zinman found that 70 percent of the payday borrowers he surveyed either were not aware of or had no alternative to borrowing from a payday lender.

Credit has risks

Some payday advance customers borrow frequently. However, consider also the debt trap of credit cards and mortgages. Few people ever will own their home outright, as few people stay in the same house or city for long enough. Because more money is lent by banks and credit card companies, those debt traps are legitimate according to social crusaders. That is some severely fuzzy logic. You can read more in the Payday Loan Facts and Statistics report on Personal Money Market.