Payday Loans & the Fringe Economy
We DINKs know that you have better things to do then sit around and cruise the net for personal finance article, so we wanted to let you know about an interesting piece on payday loans and the fringe economy from Alternet.
The basic point of the article is that payday loan making organizations like check-cashers, rent-to-own business and pawnshops constitute a whole separate "fringe" sector separate from the mainstream economy. A basic characteristic of this fringe economy is it's catering to poor or financially disadvantaged persons with the use of high interest products such as payday loans. It's an interesting article and outlines how payday loans have a detrimental impact on poor peoples budgets.
Enjoy!
Best,
James
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2 comments:
The same thing happens with the Refund Anticipation Loans or Rapid Refunds the tax shacks push. I call it 'fleecing the poor.'
I did not become a CPA to become a loan shark so I do not offer these usurious loans to clients.
Another example, though on a smaller scale. My car insurance company offered to let me delay half of a $90 payment for a 60-day period, cost s $7 "service charge". Not quite as bad as a payday loan, but still a higher effective interest rate than even a credit card. I chose to decline their offer and paid the bill in full.
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