|By PR Newswire||
|September 6, 2013 06:00 AM EDT||
HOUSTON, Sept. 6, 2013 /PRNewswire-iReach/ -- Startling, but true. Banks are finding a growing revenue source in the form of overdraft protection fees as cash-strapped consumers strive to dig their way out of the last five years of economic turmoil. In 2012, revenue from overdraft fees grew by $400 million dollars or 1.3 percent from 2011 and reputable economic research firms, such as Moebs Services predict the volume will rise to all-time highs by the end of 2016.
While that trend may be bode well for the banks' bottom lines, it's not so good for the typical bank customer who is growing weary of the over-priced, so called overdraft protection services provided by the banks. Now, more than half or 20 million of the fed-up consumers are turning to payday lenders. Why? The NBC article states, "A payday loan is significantly cheaper."
Moebs agrees. In the article, Moebs describes how "payday lenders are the low-price source for short-term cash needs." The research indicates the median price for a payday loan is $16, while community banks charge $25, credit unions charge $27 and banks and thrifts charge $30.
And here's an interesting trend. While the cost of overdraft charges is rising steadily, the cost of a payday loan is going down from a median of $17.50 in 2011 to $16 in 2012. According to Moebs, megabanks and payday lenders each make on average about $3 profit per $100 in overdraft charges or loans, but payday lenders are able to charge less because their overhead costs are much lower.
'This is something we've always known," said Mr. Mark Miller, CEO of Cashadvanceusa.net, "but it is good to see it backed by some solid economic research." "The need and demand for short-term emergency cash is growing and unfortunately, you hear criticism thrown toward the payday lenders when they actually offer a better and cheaper service than the banks and credit unions."
"Our goal at Cashadvanceusa.net is to keep the loan-finding process efficient and pass that savings to the borrower," Mr. Miller noted. "As a loan finding or introduction service, we give our users an fast and easy process for accessing hundreds of lenders. This benefits the borrowers as they can compare multiple lenders and offers and chose the best and least expensive one," he continued.
Mr. Miller also explained how a site, like Cashadvanceusa.net can bring the newest and lowest priced loan products to consumers. "We are not tied into one lender or one loan product. We can access hundreds. We scour the payday lending marketplace to find the most innovative, smart and inexpensive quick cash loans available."
Who benefits the most? In the end, it looks like the winners are the 38 million struggling consumers who frequently overdraw their checking accounts. Now, they can access the quick cash they need through lower-priced payday loans.
Media Contact: Mark Miller, Cash Advance USA Ltd, (512) 571-3828, firstname.lastname@example.org
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SOURCE Cash Advance USA Ltd