Independent research underscores need for short-term credit in Wisconsin
Julie A. Urban, Ph.D. and Marzeih Bolhassani, Ph.D., both of the University of Wisconsin System, released the findings of their recent payday lending survey today at the 2009 Understanding and Overcoming Poverty in Wisconsin Conference.
Urban and Bolhassani conducted an independent survey of payday advance customers in Wisconsin, and found, among other conclusions, that 60 percent of those surveyed view payday advances as less expensive than bank overdraft fees, and 40 percent believe credit card late payments are more costly than payday advances.
The study also finds that the majority of payday advance customers choose the product due to an unexpected expense, and they consider other options, such as bank overdraft fees, auto title loans, credit card late payments, pawn shops and borrowing from friends and relatives before taking out a payday advance.
Of those surveyed, 83 percent have overdrawn a checking account, 59 percent have exceeded their limit on a credit card and 68 percent have been denied a loan, all in an effort to obtain short-term credit. An overwhelming 98 percent of respondents think money management courses are critical to making sound financial decisions, and 45 percent of those people believe that such courses should be taught as early as middle school.
“The need for short-term credit is indisputable,” said D. Lynn DeVault, Board Chair of the Community Financial Services Association of America. “This study proves what short-term lenders have been saying for quite some time: when faced with the exorbitant costs of bounced check and credit card late fees, thousands of Wisconsinites choose payday advances to help them overcome short-term financial emergencies.”
Payday advances remain a unique short-term credit option not readily offered by other financial institutions, and a smart choice in comparison to unregulated products such as off-shore Internet lending or the costs associated with revolving credit card balances and fees for bank overdraft protection. Consumers should be smart about their money and savings, and any form of credit can be mishandled. But it is important to understand that payday advances can be an effective short-term financial solution for Wisconsinites whose options may be limited.
Check Into Cash operates 33 centers in Wisconsin. Nationwide, there are more than 1,100 Check Into Cash Centers in 30 states.
About the CFSA:
The Community Financial Services Association of America (CFSA) is the only national organization dedicated solely to promoting responsible regulation of the payday advance industry and consumer protections through CFSA’s Best Practices. As such, we are committed to working with policymakers, consumer advocates and CFSA member companies to ensure that the payday advance is a safe and viable credit option for consumers.
For up-to-date information on the industry, visit http://cfsa.com
About Check Into Cash:
Founded in Cleveland, Tennessee in 1993, Check Into Cash is a specialty consumer financial services company whose primary product is payday advances. Check Into Cash operates more than 1,100 branch locations in 30 states and is the founding member of Community Financial Services Association of America (CFSA). Check Into Cash offers a full suite of financial service products which include check cashing services, bill payment services, wire transfer services, money orders, reloadable prepaid debit cards, gift cards, tax preparation services and ATM access in select locations.