As more statistics are gathered regarding payday loans and payday advance providers, we learn more about the realities of these short-term products and fortunately for policy makers have to rely less on the anecdotal experiences repeated ad nauseum by biased consumer activist groups. In the attached report, researchers at Clemson University reveal data that suggests that legality of payday loans in a state does not increase bankruptcy percentages amongst state residents. For years leftists consumer group such as the Center for Responsible Lending, the Coalition of Religious Communities, ACORN and the Consumer Federation of America have falsely repeated time and again that allowing consumers to utilize payday loans increases the probability of bankruptcy amongst consumers. The Clemson Study debunks this myth. Those interested in ready a synopsis of the study can view it here or the full study here.

Policy makers looking to take action against these short-term payday advance loans should carefully review pertinent payday loan studies before making rash decisions at the behest of consumer groups. The findings of the Clemson study is simply another example of how the fact surrounding payday loans reveal how useful a financial tool it can be for those looking at short-term financial needs.

Financially strapped consumers certainly aren’t catching a break from their banks when it comes to the ever-escalating fees and minimum balance requirements for checking accounts and fees and surcharges for ATMs.

There are far safer havens for savvy customers, and if you can live with a free checking account, which generally means no interest, you’ll do your finances a favor.

Here’s what Bankrate found in its 2008 checking study:

-Bounced Check Fees hit New High Again

-ATM Surcharge and fees continue climbing

-Interest Accounts Require High Minimums

-Online Banking Can Be Pricey

Methodology: Bankrate.com surveyed one interest checking account and one non-interest checking account at each of the largest banks and thrifts in each of 25 large markets to find the latest trends on checking account and ATM fees. There were 247 interest accounts and 226 non-interest accounts surveyed at 249 banks and thrifts in the top 25 metropolitan areas.

Cash Advance and Payday Loans pricing remains flat amongst the non traditional segment.  However, as banks and credit unions begin to offer these products, they are increasing their pricing as they find the right pricing point for their customers.

Bankrate.com also looked at 22 checking accounts at 18 institutions offering online accounts and compared them to their brick-and-mortar counterparts.

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A story about the increasing cost of credit for consumers courtesy of the MailOnline website.

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American Express has increased the cost of borrowing on one of its credit cards to 46 per cent — more than 30 times the Bank of England base rate.

The company now charges 46 per cent APR on the British Airways Premium Plus card, making it Britain’s most expensive credit card.

Consumer groups said the cost of borrowing on some credit cards had now lost all touch with the base rate.

A series of other cards also have APR over 35 per cent — despite interest rates now being at the lowest level since the Bank of England was set up in 1694.

Other cards include Virgin Money American Express at 37 per cent and Citi MasterCard at 41 per cent.

Consumer group Which!’s credit card expert Martyn Saville said the Amex rate was ‘ridiculous’.

He said: ‘This is over 30 times base rate.

‘Credit card interest rates now bear no resemblance to Bank rates — it is just about what companies think they can get away with.

More…

* Bad news for your nest-egg as the base rate drops to a record low

‘Even at 19.9 per cent it is far too high.’

The Amex rate was sent soaring from 36.6 per cent to 46 per cent because the issuer increased the annual charge paid by customers from £120 to £150.

APR calculations take into account the annual fee, prompting the vast rise.
Enlarge Rates

Four of the five cards with high APR have annual fees of up to £300. Amex said the interest charged on transactions had also risen, from 16.9 per cent to 19.9 per cent.

An Amex spokeswoman said fees had not gone up for the last seven years.

‘We”ve held off making any fee increases, however the cost of providing these products has increased.

‘Rather than reduce the benefits on offer, we’ve slightly increased the fee.

The card offers British Airways frequent travelers benefits including 1.5 Air Miles for every pound spent on the card. British Airways said the APR was a matter for Amex