CashNetUSA LLC said it plans a February launch for a stored-value card designed to let payday loan borrowers get their money faster.
Al Goldstein, the president of the Lake Bluff, Ill., payday lender, said funds from the loans will be loaded on to the cards. Payday loans are usually sent straight to a consumer’s banking account through the automated clearing house, and the funds are generally not deposited until the next business day, he noted.
For instance, if a loan is made on a Friday after banking hours, the funds would not show up in the consumer’s account until Tuesday.
“A lot of customers can’t do that,” Mr. Goldstein said in an interview Thursday. “It’s not feasible, so the debit card allows them to get the funds instantly.”
The cards will work at automated teller machines and point-of-sale terminals at all the major electronic funds transfer networks, including Star Systems, the NYCE network, Pulse EFT Association, Visa U.S.A.’s Interlink, and MasterCard International’s Plus, Mr. Goldstein said. He said his company is not the first payday lender to offer debit cards.
CashNetUSA will not charge for providing the card, and the loan rates will be the same as on traditional payday loans, he said. (Percentage rates on these short-term loans can run into the triple digits when annualized.) The company says it can review a loan application and have an answer within 30 minutes.
It offers payday loan cash advances in Alabama, Arizona, Idaho, Missouri, New Mexico, Louisiana, Nevada, Oregon, South Dakota, Utah, Washington, and Wisconsin. It said it plans to offer them soon in its home state as well as in California, Colorado, the District of Columbia, Delaware, Hawaii, Kentucky, Minnesota, Montana, North Dakota, Nebraska, New Hampshire, Ohio, Oklahoma, South Carolina, Tennessee, and Virginia. It has license applications pending in these states.
