Payday Advance National Customer Survey

Commissioned by CFSA in 2004, a survey was conducted by Cypress Research Group to examine the degree of customer satisfaction. Two thousand payday advance customers were surveyed in efforts to examine industry performance from the customer’s perspective, evaluate the long-term viability of the industry, and assess consumer confidence in, and satisfaction with, the payday advance service.*

Study Highlights:

While younger than average, payday advance customers are generally middle-income, educated, and look much like the general U. S. population.

• More than two-thirds (69 percent) of customers have annual household incomes of more than $25,000.
• More than half (52 percent) of customers are middle-income, earning $25,000 to $50,000 a year.
• Forty-one percent of customers own their own home.
• Almost half (49 percent) of households have children under 18; parents are more likely to be married than single.
• Only 15 percent of customers are older than 55, and 5 percent older than 65 (vs. 22 percent and 12 percent, respectively, of the U. S. adult population).
• The majority (61 percent) of customer base is Caucasian.
• More than half (58 percent) of customers have attended college, and one in five (22 percent) has a bachelor’s degree or above.

Consumers have other financial options available – but payday advance can sometimes be a better financial decision and is quick and convenient.

• Two-thirds of customers have at least one other option that offers quick access to money. (That rises to 85 percent if savings accounts are included. )
• Half of customers have overdraft protection on their checking accounts.
• Fifty percent of customers have a major credit card(s), 35 percent have credit card(s) with credit available.
• In comparison to other credit products with which respondents had recent experience, customer overall satisfaction with payday advance (75 percent) was second only to check overdraft protection (83 percent). It also ranked higher than a home equity line of credit (71 percent), major credit card (70 percent), loan with a bank or credit union (69 percent), and a car title loan (69 percent).

Consumers weigh the benefits against the costs.

• Most (65 percent) customers cited convenience-related factors (less paperwork 2 percent, quick and easy process 38 percent, fast approval 10 percent and convenient location 15 percent) as the major reason for choosing a payday advance.
• Eighty-five percent of customers surveyed were satisfied with the convenience of the lenders’ hours and locations, as well as the location’s safety.
• Twenty percent of respondents cited comparisons to other financial services and providers, such as less likelihood to harm their credit, less expensive than other sources of short-term cash, the lack of revolving debt, greater privacy and more respectful employees.
• A large majority of customers cited the following reasons for taking a payday advance:
• cover an unexpected expense (84 percent);
• avoid late charges on bills (73 percent);
• avoid bouncing checks (66 percent); and
• bridge a temporary reduction in income (62 percent).

• More than three-quarters of customers were satisfied with the repayment schedule, the amount they could borrow and their ability to refinance or renew if they chose.

Consumers understand the fee and payback structures.

• Ninety percent of respondents were satisfied with their understanding of the terms and cost of their payday advance, although just under half (47 percent) were satisfied with the fees.

Consumers are pleased with the service they receive from lending staff.

• Customers were highly satisfied with all aspects of service received during the payday advance experience (88 percent during application, 85 percent during the loan term, and 82 percent during the payback or collection period).
• Nine out of 10 customers were satisfied with the courtesy and professionalism of the lending staff; more than 85 percent with how they were treated during the application process and loan term.
• During collection, 82 percent were satisfied with the frequency of reminder calls and 87 percent were satisfied with the professionalism and courteousness of staff who called.

Consumers are skeptical of government involvement in payday lending.

• Eighty-six percent don’t want officials limiting the frequency of their loans or monitoring their payday advance records.

Review full study » (PDF)

* Cypress Research Group
Shaker Heights, Ohio
June 2004