Because the fee is charged over a very short time. $14 on $100 for 14 days, annualized, is about 365%. A credit card at 20% a year costs well under $1 on the same $100 for two weeks.
Why is the APR on a payday loan so high?
Because the fee is charged over a very short time. $14 on $100 for 14 days, annualized, is about 365%. A credit card at 20% a year costs well under $1 on the same $100 for two weeks.