In the past, loan sharks were arrested for the cash advances they provided, partially due to their unethical means of collection, which sometimes involved physical violence.
However, modern-day banks charge the same exorbitant interest rates for these advances, yet get away with it. Granted, they do not go out and break legs to collect the money (we hope), but how are they not subjected to punishment for practices that take advantage of individuals in bad financial situations?
Banks are subject to a specific set of regulations regarding fees and interest rates. As long as they adhere to these, they are not breaking the law and there are no consequences.
Opponents say that credit card companies, banks, and providers of payday loans are in cahoots with the government, funding political campaigns.
The bottom line is that consumers should read the fine print regarding the loan terms and conditions. Banks can charge cash advance interest rates of 20 percent or higher in addition to penalties, late fees, and monthly charges.
This means that an individual must do some research and comparison shopping before applying for a cash advance loan. If due diligence like this is not taken, people can find themselves financially worse off than before they applied for the cash advance.
