Well, what you point out shows why people need to be educated about consumer finance. People who are educated will make better decisions about their money, borrowing money, etc.
Having said that, I don’t know that I would want to ban payday loan places. I don’t know enough about the industry or how they operate. But, interest rates of 300% and more seem excessive.
Has anyone here ever taken a payday loan? Ever dealt with these places, and can fill us in? Do they really try to steer you to a car title loan at a high interest rate?
I know not everyone has a line of credit, or a credit card. But for those who do, even getting a cash advance on a credit card for an emergency expense, is a far lower rate of interest than you pay at a payday loan place.
My Daughter did and was dumb enough to try to cover it with a title loan on the car that I bought her. I stepped in when I found out what was going on and paid off the loan which had escalated to more than the car was worth. A $50.00 loan cost $3,500.00 to retrieve the title, 4 weeks after the 1st loan.
I used them one summer. Pledged my car. In 30 days, I paid the interest and some more. The balance rolled over. It took about 6 months, but I became free that way. I don’t think I did anything immoral and I received help I needed without bothering a family member or friend.