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Exactly, the risk is the first big difference. With Payflow, you can never spend more than you have already earned.

The second thing is most blue-collar workers in most countries can’t get credit cards at all.

Yes I think that is what is most confusing to me about why payday loans are so much more expensive. The creditors are taking on less risk than with credit cards and yet the return is greater.

The rates are typically high because they are loans of last resort and people still default. Typically people, in the US at least, have absolutely terrible credit and no one will extend to them.

And while there are exceptions, typically people with horrible credit are likely to continue the cycle.

Yeah I get that from a demand perspective. I guess I don't quite get why there isn't more competition from a supply perspective. They are small loans that are secured. Why not offer the cheapest rate and dominate the market? It almost seems like the stigma around paycheck loans as being predatory is making them more expensive.

What happens when an employer goes bankrupt? Heck of a lot of correlated risk.