The multi billion dollar cash advance and payday loan industry has come under heavy fire by many individuals and local government. Is the criticism warranted?
(PRWEB) November 15, 2005 -- The Cash Advance and Payday Loan industry has come under fire recently. While there are many advocates of the service, there are almost as many disparagers. The Cash Advance and Payday Loan industry has always had its fair share of opponents over the last few years, but now many local governments are moving in to have these services banned outright. Is the disdain for these services warranted?
The Cash Advance and Payday loan industry is a multi billion dollar industry, and grows at an alarming rate each year.
For those unfamiliar with the services, a cash advance is a financial service that allows an individual to borrow money (typically up to $1,500) for a fee, using their current job as payment collateral. This service actually goes by a plethora of other names, such as; personal loan, online payday loan, quick cash advance, pay advance, personal cash loan, ECT.
While the proponents of the service praise its ease of use and availability, its detractors evoke harsh criticism of high fees and the allure of being able to repeatedly borrow money from these services. Some local government has even gone as far as to banish the service from their state, and the issue has even come up in big government.
The issue at hand though, is this; does the government actually have a right to ban cash advance and payday loan services? Does the government plan on banning credit cards or the numerous other thousand loan providers? It is likely they will not, even the credit card providers with notoriously high interest rates are safe.
Is it possible that the local and state government want to lock down these services because many of them are from privatized funding as opposed to institutionalized funding? Perhaps, but is that really the issue at hand?
In regards to payday loans, or any other type of loans or credit cards, the issue should be personal responsibility. If an individual is unable to afford a car loan, or a high ticket item on their credit card, should the government or anyone else come in and ban the service that afforded them the loan or card? That is quite doubtful. People must learn to be responsible with their finances, and not bite off more than they can choose.
While proper usage of the service can be helpful, especially in emergency circumstances, improper uses of Cash Advances can lead to a reliance on the service, heavy fees and lead to more destructive financial problems.
When it comes to Payday Loans and Cash Advances, just like any other financial service, understanding your options and educating yourself is always the most prudent way to move ahead. Banning it on the other hand, is just merely taking away available choices and shunning the thought of personal and financial responsibility.
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