Loan shark in your pocket: Cellphone cash advance apps leave many consumers worse off

(TriceEdneyWire.com) – Many Americans continue to find it challenging& to keep up with the rising cost of living. Despite economic reports attesting to a growing broad economy, the majority of Americans’ household finances feel insecure – especially people who live paycheck to paycheck with little or no savings.The financial marketplace has responded to this ongoing consumer cash crunch with an emerging predatory lending product designed to take full advantage of consumers’ financial mismatch: earned wage advances. These cash advance products are small, short-term loans, typically ranging from $40 to $200, that are repaid on the consumer’s next payday either directly from a bank account or as a payroll deduction. They’re also conveniently available with a few clicks on borrowers’ smartphones.Related Stories But as with other predatory loans, wage advances also create a deceptive and highly profitable cycle of debt built upon repeated reborrowing with interest equivalent to 300% annual percentage rates or more. In most cases, these cash advances also lead to frequent overdraft fees. The combined repeat borrowing and high costs result in unsuspecting consumers learning the so-called convenience brought more – not less – financial hardship.This summer, the Consumer Financial Protection Bureau shared its early analysis of this...