Blog Minx

I’ve been playing around with keyword searches and checking their popularity. Do you know ‘payday loans‘ is one of the most popular financial search keywords? Type it into Google and you get several million results and a gaggle of companies all clamoring for the top ad spot.

A payday loan is a small amount of money (well, up to $1,500) paid to you in advance until your payday. Once your loan request is approved, you send them a check and they wire the same amount straight into your bank account. Then when your payday arrives they cash the check you sent.

Sounds great, right? An easy, short-term cash advance. No wonder the demand for it is so high. But Bankrate.com says no, it’s not a short-term fix at all. It’s obviously popular with all the people who live from paycheck to paycheck and spend before they’ve earned, but spending pay before you’ve earned it leaves you short next time. And so on. It’s also expensive: you’re paying loan fees each time.

I also know from experience how the simple things are really the most expensive. My student loan 10 years ago was ordered via an automated voice over the phone. “Type in the amount you wish to receive. You can order up to $30,000… Thank you! That amount will be deposited into your account tomorrow.”

But I wanted to see more about how so-called payday loans worked, so I opened a random site from my Google search. Its ad had promised me: “$1,500 today. No credit check, no faxing.” Which is good because I haven’t owned a fax in about 50 years.

Inside, there were smiling faces and pictures of banknotes. “Cash wired to your bank account in one hour!” the page promised. The pictures of banknotes seemed to get bigger, but maybe it was just me. I clicked the button…

There was a simple form to fill in. I filled it in. But at the bottom came the catch: Are you a US citizen? No. So that was it. The easy money floated away.

Have you ordered a payday loan before? What happened?