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The Greater of Two Evils

Your article is right on. Payday loans are evil; however, many or most banks do something even more evil. I have been in a situation before where I could see by my online balance that we were about to have an unfortunate collision of deductions in our checking account. I didn't know what else to do, and I let the checking account go into overdraft the next day. The bank charged over $900 in fees for what was less than $100 in overdraft. They would not forgive any of it.

After this experience, I switched banks. At present, I don't have a credit card because we have a recent bankruptcy (the checking account mishap certainly didn't help!). A few weeks ago, I saw that an automatic deducation scheduled for the next day was going to put us into overdraft. I work from home doing freelance work. Several companies in various parts of the country owed me hundreds of dollars and had been slow about paying it. I made a financial decision to obtain a payday loan to cover the automatic deduction that was going to come out the next day. I paid $22.50 in order to borrow $150. That beats one overdraft fee of $37. I probably would have had several overdraft fees.

In less than two weeks, a couple of my customers had payed up, and I was able to pay it off. Would I do it again? Yes. Paying 400% interest rate is better than the alternative of a bounced check. My husband works out of town on a regular basis. He uses his bank card to pay for stuff, and although we try to be responsible and frugal, there are times when the amount of money left over gets really tight. I would rather do the payday loan again than to risk a bounced check.

I received an income tax refund last week. I'm shopping for a new bank again now that will automatically transfer from my savings account (income tax refund money is going there) into checking in the event of an unfortunate collision of financial need.
Linda

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