Payday lenders gear up for busy holiday season
Retailers are reporting mixed results leading in to the final days of Christmas shopping, but there's still one sector that is expecting to do big business this month: payday lenders who offer low-dollar, short-term, high-interest loans to the most vulnerable consumers.
Payday loans are designed to tide borrowers over until their next pay cheque. The amount you can borrow is usually limited to 50 per cent of net pay, at interest rates that make credit cards look like a real bargain.
These loans then trap borrowers in a cycle of mounting debt. Charges escalate when the borrower is unable to repay the loan at the end of the month, or can repay but immediately needs to borrow the same amount again.
Some consumer advocates even think they payday lenders should be legislated right out of business. But there are ways to protect yourself. As a consumer, you have rights, for instance.
Proponents of payday loans claim that forcing them out of business will hurt those who need help and have no other place to turn for short-term lending solutions. They also argue that loans aren’t actually as onerous as their opponents charge.
But whether or not these loan centres should exist, they’re certainly becoming more and more popular, particularly around the holiday season.
If you're tempted, the Center for Responsible Lending offers these alternatives to payday loans.
- Working out a payment plan with creditors
- Asking for an advance at work
- Finding a community-based emergency assistance program
- Getting a loan from a credit union
- Getting a cash advance from a credit card
Have you ever used a payday loan service? Would you describe yourself as a regular customer? What was your experience?
By Gordon Powers, MSN Money
Posted by: Al-man | Dec 14, 2021 10:38:17 AM
People should stay away from these places. Its legalized loan sharking. By the time you pay the fees and the crazy intrest rates, you owe more than twice what you borrowed. These kinds of places prey on the desperate. I wish the Gov't would make them illegal. The only people who like them are the ones running them.
Posted by: Richard | Dec 18, 2021 7:36:38 PM
People that use these are just plain stupid. They deserve to be poor.
Posted by: Randy Kubbernus | Dec 19, 2021 12:57:04 AM
I have a small retail store in a town in B.C.Well low and behold if a red cull winged lamborghini pulls in out jumps a couple.I ask him how did you make enough money to afford a car like that,he says I own a money mart up in Alta.His wife says would I like to sit in it and get my picture taken.No thanks felt like getting in and pukeing on the seat!
Posted by: don | Dec 19, 2021 2:21:54 PM
Since these "businesses" came into the area I live, there are a lot of people that the banks will not give accounts to so there only choice is to use these. It is a case of bending over the people who can least afford it. Sad really.......
Posted by: John Gaul | Dec 20, 2021 3:29:23 PM
The fact that these places can exist in our society shows how far we have declined. Guess who own these places and guess why the governments provincial and federal do not shut them down.