$3 ATM Fee Expressed as a 730% APR: Ammunition
Published: Wed, 05/08/19
I know, I know... I'm beating a dead horse.
And I hate APR comparisons but they come with the business of lending to the masses.
APR comparisons & demand for small-dollar loans!
Jeez! Federal Reserve Board Governor Lael Brainard said, "Even with the improvement in financial outlook, 40 percent of US households still say they cannot cover a $400 emergency expense or would do so by borrowing or selling something.
So, the demand for our loan products continues to escalate!
The small-dollar consumer credit industry [payday loans, vehicle title loans, installment loans, line-of-credit loans...] is attacked daily for charging loan shark APR rates.
You're smart! You would not be subscribing to my ramblings if you weren't :-)
So, next time you're dealing with a so-called consumer advocate, a member of the fake news, your family member who works for the government... just point out the 730% APR banks charge all of us when we get our own cash at an ATM Machine.
Friday p.m. and you need $50 cash.
Lo and behold, there's an ATM next to TGI Fridays where you're going to meet your Buds.
Man, it sucks that this ATM is not with your bank but you don't want to meet up without some cash!
You pull out your debit card, grab your $50 cash AND pay a $3.00 ATM [out of your network] fee.
This $53 is debited from your bank account Monday night.
Thus you have use of this $53 for 3 days.
$3.00 fee for three days = $1/day.
$1.00 divided by $50 X 365 days = 7.3 or in other words a 730% APR. To access $50 of YOUR MONEY!
Expensive?
Do you know that a typical $35 bank NSF fee can have an 1800% APR?
Next time you're in another stupid APR conversation with your adversary, stop them in their tracks!