Industry Facts
Payday cash advance companies, like Advance America, provide quick access to funds that help working Americans meet their financial obligations. Payday advances can be a good choice for consumers who seek a measured and responsible tool for managing their cash flow, particularly balanced against the cost of bouncing a check or missing a credit card payment. Indeed, millions of consumers have avoided excessive credit card late fees and interest, high non-sufficient funds (NSF) fees and other punitive costs for missed payments by utilizing our products.
Responsible use of payday advances allows consumers a firm footing to overcome unplanned financial circumstances. They can be the right option for those who experience unexpected expenses or other sudden financial needs-a car requires urgent repair, a family member has a medical emergency or a furnace stops working on a frigid winter night-and have the ability to pay off an advance in a timely manner. A payday advance must be paid back within a specified time period, typically two weeks, and unlike other financial services, the fee does not compound interest. This product provides a proportionate remedy to meeting working people's short-term needs.
Nearly all of those who use payday advances do so responsibly, meeting their financial obligations on-time. Contrary to the image presented by some of the industry's critics, payday customers all have steady incomes and active bank accounts. And they are overwhelmingly happy with the product, registering very few complaints.
Our industry welcomes regulations to provide consumer protections, while preserving access to short-term funds for thousands of consumers who need it. The trade association for our industry, the Community Financial Services Association of America (CFSA), promotes laws that provide substantive consumer protections and encourage responsible industry practices. Thirty-seven states and the District of Columbia have approved regulation of the industry.
We believe that consumers should always choose carefully when they take out a payday advance or use credit. But thousands of hardworking Americans who perform essential jobs in our society-teachers, police officers, bus drivers-sometimes find themselves struggling to make ends meet between pay checks. They have a thin financial cushion. The growing demand for our product reflects the financial pressures that our customers face everyday. Responsible payday advance companies offer them a tool to manage their money and maintain their credit rating, while covering shortfalls with dignity and privacy.
To secure an advance, a customer visits a center with government issued identification, a proof of steady income and a bank statement. After completing an application form, the customer signs an advance agreement and writes a personal check for the advance plus a fee (typically $15 for a $100 advance). The customer receives cash or a check for the advance amount and returns on the arranged date, typically their next payday, to repay it and reclaim his or her personal check.
