Payday loan companies have some of the best marketing tactics out there. Sometimes they even have better marketing than credit card companies. Since I already tackled how young people can deal with cash advances/payday loans and credit cards for 20 somethings, I wanted to take a different approach today.
(Note: Now mind you I’m not against either option if you used responsibly and out of complete desperation)
Near my home there is a fairly new plaza where I walk by at least once a week. One of the units there is a payday loan company. I usually walk by and check out their posters to see what kind of marketing techniques they’re using at the time. Two new marketing posters were put up by the cash advance company and I really wanted to comment on them:
“The Non judgmental loan”
In fact I’m sure the payday loan is one of the most supportive loans. The payday loan companies will give you that loan with a big smile on their face. These companies prey on vulnerable people that have nowhere else to turn for money. Chances are that the payday loan users have already maxed out their credit card, cashed in with friends & family, and used up all of their opportunities with their local bank.
Sometimes a thought provoking conversation about debt and about your money management with a good friend is needed. Of course the cash advance company won’t judge you because they want you as a repeat customer. Just like how a McDonald’s employee will never tell you how detrimental their food is to your health. Just because a friend points out a weakness in your money management it doesn’t mean that they are judging you or trying to attack you.
We are all guilty of keeping our guards up and negatively responding to any sort of criticism. It also doesn’t help that most young people are horrible at giving out constructive criticism. If you do take anything away from this article then let it be this- next time a close friend confronts you on your money issues, try to be open to a conversation.
“The stress free loan”
Well sure you won’t be stressed when the payday loan company hands you over the money but we’ll see where your stress levels are at when the payments are due. I’m sure the actual acquiring of the payday loan is fairly stress free. The question is- how will you feel when you need to pay the money back but don’t have it?
The reaction you get from a friend when you ask for money should not be perceived as stress. You can’t run away from your money spending problems. If a friends tries to hold you accountable for your spending habits, it’s not done to stress you out. It’s done to help you out and to open your eyes to the flaws in your personal finance system.
Have you seen any great cash advance marketing? What are your thoughts on the marketing tactics that I saw?
photo: welendcashhouston
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Okay, I live on a poverty-level income, so I don’t think I have a spending problem.
Now I have two money-making issues:
1) I see some opportunities to buy some things at approx one-half their value and resell them on eBay for full value. (e.g. buy things for $10-$25 and sell for $20-$50)
2) In order to successfully execute #1 above, I need some computer upgrades (e.g. I’d have to post pictures of my items)
So in order to take advantage of these money-making opportunities, I need a little startup capital, which I can’t quite build on a poverty-level income.
What would a friend say/suggest?
Thanks for prompting a thought provoking response! My thoughts:
1. Startup capital greatly differs from a payday loan/cash advance. There is a massive difference between borrowing money for personal consumption and borrowing money to launch a potentially profitable business venture.
2. My question to you is: can you make some money first before you need to borrow money? Can you try to use computers in your public library (if allowed of course) or use a computer at a friends house until you have enough money to justify the upgrades?
3. If you absolutely need startup funding from a bank/loan company, how long do you estimate it will take you to pay it off? How long can you carry on the burden of having to pay back that debt? What interest rate will you be charged?
I applaud your ambition and I encourage you to comment or email me whenever you have any questions. I have made money on eBay in the past and I think that it can be fairly lucrative if you are willing to put in the work.
I’m thinking I’d need: (cost estimates high end to avoid overruns)
1) home internet service $40/mo + maybe one-time $50-$75 for modem/router
2) scanner $25
3) basic used windows computer (for compatibility with #1 and #2) $50
So I think a $200 30-day payday loan would be sufficient to get me started. I already have $500 of things to sell, which would repay the loan and provide cash for future purchases for resale.
I can’t think of a way to get started before I need to borrow money, since I’d need to take and post pictures and can’t do that from a library computer.
Now that you have explained your situation Terry I have 3 words for you- GO FOR IT.
We all know that you need to spend money to make money. If your calculations show that $200 will help you earn $500 then by all means pursue this venture.
My post was aimed more at the people that are stuck in the viscous payday loan cycle. If you are confident you will pay the loan back when it is due then I see nothing wrong with your situation. I just hope that your calculations and predictions are correct.
One favor to ask of you Terry- Please keep us updated at Studenomics with your progress.
Terry: try your local Freecycle group – http://freecycle.org/
Things such as your #2 and #3 are given away for free regularly on Freecycle. And you might even find some more stuff that’s eBay worthy, as well!
Not only do they use creative marketing techniques, but they are very crafty about the location of the establishment. They have been found to typically exist in low income neighborhoods, marketing (if only though visuals) by being in the location where they are most needed.
And to terry:
Keep up the entrepreneurial sprit. You may need some start-up capital but it sounds like you’ve got a solid amount of things to sell. Definitely check out freecycle or craigslist (the free section) to find good free stuff…
Good Luck.