Article by Jackie B
Payday Loan Dependency Rises by Jackie B
The slowly diminishing economy of the past two years is taking a toll on several aspects of our country, leaving millions of Americans without jobs or money. With no where else to turn, several Americans have put their faith in payday loans. For this reason, the payday loan industry has seen a rise in their number of consumers and profits. It could very well be one of the few industries not affected by the crumpling economy. But why the sudden rise? In these times of struggle, payday loans seem to be the only alternative for many hard-working Americans.
The payday loan industry has always been a profitable market and it is easy to see why. These loans are simple to get and are offered not only in most cities across the country, but all over the web as well. They appeal to a great number of lower-income consumers because they do not discriminate against bad credit or financial problems. When applying for a loan all that is needed is a steady income of at least 00 USD per month, proof of US Citizenship and to be over 18 years of age. The loans are deposited into the consumer’s bank account within 24 hours and are usually required to be paid back within two weeks. All these attributes make payday loans a desirable and attainable option.
While houses are being foreclosed left and right and people are struggling to make their monthly payments, payday loan outlets are making their existence heard. In Cleveland, Ohio, where the housing market has been hit substantially hard, there has been a rise in loan advertisement. These advertisements are presented in the form of brightly colored banners and signs, leaflet hand-outs and booming online advertisement among others. Without a doubt, these seem to be working. In the past year, loan dependency by consumers has more than doubled.
Most consumers feel forced to use payday loans when their next pay check is a week away but they need money for food and gas right away. These essentials have become more expensive over the past year. These loans are also convenient to pay off accumulating debt from credit cards, home loans or car loans. By doing this, they can avoid building up pending debt and in turn, hurting their credit further.
Additionally, a lot of consumers cannot turn to more traditional forms of credit, such as credit cards or savings accounts because they do not have bank accounts. This is the result of poor money management, debt problems and poor credit scores. Without a doubt, consumers feel comforted by the payday loan industry’s lack of discrimination in their policies. Sadly, banks do not want to get involved with short-term loan lending because they feel it is not worth the hassle and the profit is not substantial enough.
For these reasons, the payday loan industry has developed into the leading source of money borrowing. Unfortunately, it has also been the cause of more debt accumulation among consumers because so many of them are not able to pay back the loan on time or because they did not fully understand the loaning process. Payday loans are a good alternative as long as they are used properly. Improper use can end up burying more struggling Americans in debt.
About the Author
Jackie B writes for MyCreditSearchSite where she reviews Credit Offers and Payday Loans