Payday Advance Pennsylvania Customer Survey
Conducted in 2005 by Cypress Research Group
Shaker Heights, Ohio
Commissioned by CFSA
A representative sample of customers who obtained payday advances from CFSA-member companies in Pennsylvania were interviewed by telephone in early 2005. The primary research objective was to examine industry performance from the customer’s perspective, evaluating consumer confidence in and satisfaction with the service. Results from the statistically representative sample of 405 have a margin of error +/- 5% at the 95% confidence interval.
Key Findings
While younger than average, payday advance customers in Pennsylvania are generally middle-income, educated and have children in the household.
• More than half (54%) have annual household incomes of more than $25,000, with 40% earning $25,000 to $50,000 a year.
• Almost half (46%) have attended college, and one in five (22%) has a bachelor’s degree or above.
• 43% own their own home.
• More than half (53%) of households have children under 18.
• 58% of customers are under the age of 45, compared to 40% of Pennsylvania’s adult population as a whole. Only 3% are older than 65 (vs. 16% of the state’s adult population).
Consumers have other financial options available – but payday advance can sometimes be a better financial decision and is quick and convenient.
• 43% of payday advance customers have overdraft protection on their checking accounts.
• 50% have a major credit card(s), 29% have credit card(s) with credit available.
• In comparison to other credit products with which respondents had recent experience, overall satisfaction with payday advance (80%) was comparable to check overdraft protection (83%) and a personal loan with a bank or credit union (82%). Satisfaction was higher than with a car title loan (71%), major credit card (68%) and a home equity line of credit (67%).
Consumers weigh the benefits against the costs.
• Most (65%) cited convenience-related factors (quick and easy process 40%, convenient location 16%, fast approval 8% and less paperwork 1%) as the major reason for choosing a payday advance. Customers were highly satisfied with the convenience of the lenders’ hours (83%) and locations (85%), as well as the location’s safety (93%).
• 13% cited comparisons to other financial services and providers, such as less harm to 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 said a payday advance had helped them: cover an unexpected expense (79%); avoid late charges on bills (73%); and avoid bouncing checks (67%).
• More than three-quarters were satisfied with the repayment schedule (82%), the amount they could borrow (89%) and their ability to refinance or renew if they chose (88%).
Consumers understand the fee and payback structures.
• 92% were satisfied with their understanding of the terms and cost of their payday advance, although just over half (54%) 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 (90% during application, 89% during the loan term, and 86% when called during the payback or collection period).
• Nine out of 10 were satisfied with the courtesy and professionalism of the lending staff.
• During collection, 79% were satisfied with the frequency of reminder calls and 86% were satisfied with the courteousness of staff who called.
Consumers are skeptical of government involvement in payday lending.
• Most customers don’t want officials limiting the frequency of their loans (88%) or monitoring their payday advance records (83%), although only 38% disagree with the government’s limiting fees.
Read the full study (PDF)
