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October 22, 2009



"For people to exchange money-today for money-tomorrow is perfectly sensible and rational on both sides, like trading haircuts for nails or bread for cars or any other ordinary, voluntary, mutually beneficial exchange, and there's no reason that the price should be $1:$1."

Well said! I think I may appropriate that comparison for my own explanations of the matter, if you don't mind.

As a side note, many states do have anti-usury laws, though there is no national law. There's various rules for credit cards, but these are mostly in response to clauses that allowed lenders to jack up interest rates suddenly in response to small or even inadvertent violations* of terms. The rules also govern the extent to which rates can be raised when a borrower is in significant violation.

*Example: a credit limit gets lowered - current debt is essentially always grandfathered so that they can't charge you overlimit fees, but if you made a new charge, then bam, you could be paying an overlimit fee as well as interest at the default rate. This sort of thing really only happened on low-quality cards, but people with low-quality cards were exactly the sort to find such unexpected expenses crippling.


Being a thinker has more advantage. Simple as that.

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Only use a payday cash advance as a last resort.


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