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those in need of urgent cash are better off with a payday loan from a bank overdraft authorized

Up to 2 billion people could be using payday loans, according to a report released last week by the Association of Professional Recovery (R3). On the back of this news, the Labour MP Stella Creasy called for greater regulation of payday lenders and interest rates before Christmas hats.

The report surveyed 2.005 people R3. Of these, 67 had experience with payday loans - only 3%. The report suggests that in the next six months to double that number could seek short-term financing, such as short-term loans to help cover the cash deficit. Much of the report, in fact, highlights the difficulties that ordinary families are faced with the costs of repayment of bank loans, credit cards and mortgages and deal with tax increases and reduced services.

a much more detailed report on the payday lending industry, users and regulatory experience came last year by Consumer Focus. The report found that many people find that payday loans should, with the almost instantaneous transfer of funds. Users said they were happy to avoid banks, and could face a problem without resorting to family and friends. The data examined how the use of pay in the United States reached the flow of credit in the short term, and in some cases, to avoid the financial crisis. It also showed how the rate caps in two U.S. states has led to more complaints about debt problems and bankruptcies rise.

short-term loans can be expensive, with a charge of approximately £ 30 to £ 100 borrowed per month - an APR of around 2.000%. The industry argues that payday loans should be used for such emergencies and are much cheaper to use an unauthorized overdraft or unarranged high street, which can lead to a charge of £ 100 to £ 200 going to a limit discovered for 28 days - an APR of 819,100%.

Then there is the high cost of short-term financing. If unauthorized charges banks were not as high, payday lenders argue, it is at its current level. It is estimated that these costs billions of pounds a year and are the poorest disproportionately by customers. The banks argue that if it does not load, free banking would become a thing of the past.

The Labour Party has had the opportunity to speak out against these bank charges in 2007 when the Office of Fair Trading gave a test case to the court that bank charges are unfair, but the party has chose not to act, and the coalition government shows no interest in reviewing the charges.

Action
against bank charges to help tens of millions of people and stop the growth of payday loans. But what politician is brave enough to be accused of putting an end to free banking?

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