Why the Payday Advance is so Misunderstood
â¬ÅPaternalism is the idea that the government must take care of its citizens because they are incapable of taking care of themselves. This big government philosophy says that people need Papa Government to step in and limit how much money people are allowed to borrow, who is allowed to borrow and what the terms / conditions are, regardless of how many people use payday advances and credit responsibly.
Unfortunately, there are some cases where people land themselves in financial trouble. Education about payday advances and borrowing on credit is very important. Some mistakenly view payday advances as a free-for-all borrowing scheme; If one abuses or manipulates the system, of course he or she will pay the price! However, honest, hard-working people can benefit greatly from a payday advance used as â¬Åshort-term emergency money that is intended to be paid back within a month or two.
Payday advances help people prevent utility shut-offs or bounced cheques, cover immediate medical expenses and function in the â¬Åreal world where critical deadlines are very much a real thing. Often it's just not prudent to wait a week or more and go through the hassle of credit checks with the bank. Most people balance their budgets on a monthly or weekly basis. Why stress yourself out now, when you know the money is coming in a week or two? Therefore, when a big medical bill or car repair bill pops up, we find ourselves in a pinch. For the otherwise responsible individual, a payday advance can be a real lifesaver! It's discreet and won't go on your credit report, you won't have to wait a long time for the money - and, if you make your payment within 14 days, you won't have to pay any interest at all!
Frequently you hear politicians preying on people's emotions, calling payday advances â¬Åpredatory loaning or â¬Åabusive. Yet these institutions are functioning as banks for lower income individuals who fall between the cracks. Consider a Federal Reserve Bank of New York study: They found that bounced cheque fees rose by $36 million dollars and Chapter 7 bankruptcy filings rose 9% when the government tried to outlaw payday advances in Georgia. Thousands of people with honest minimum wage jobs or who are receiving monthly government assistance cheques find themselves being snubbed by banks or treated without respect. For thousands of people, there is nowhere to turn when an emergency strikes.
The simple truth is that payday advances, when used responsibly, is another avenue of financial freedom that can prevent a major calamity for most working British citizens.