I’m pretty sure I have made my stance clear on payday loans. They’re expensive and I hate ’em. That said, I do take issue with an editorial (pdf) I read today in my local paper. The piece was written by Don Baylor who is a senior policy analyst at the Center for Public Policy Priorities. Here’s the part of his editorial that bugs me:
Nationwide, many workers are falling victim to “payday” loansâ€”short-term loans that give workers a cash advance on their paychecks. Large numbers of military families use these loans to help make ends meet between pay periods. So do millions of low- and middle-income people across the country. The problem is that these loans come with a major catchâ€”exorbitant interest rates that begin at 400 percent Annual Percentage Rate (APR) and can surpass 1,000%.
It is typical for a worker to pay $180 in interest on a 10-day, $700 loan.
These high interest rates make it nearly impossible for workers to repay the loan on time, causing many workers to refinance and borrow again just to pay off the interest on the first loan. One emergency can lead to a debt spiral, as borrowers take out an average of nine loans per year. The result? More loans, more debt, and more bankruptcies.
Like I said, I hate payday loans. But, why is it that every time there’s a problem, it’s always because people are victims of something? What the heck happened to personal responsibility? If people are victims of anything, it’s their own lack of sound judgement. Seriously, if people didn’t use payday loans there wouldn’t be payday loan companies.
I think the number one problem in our country right now is the victim mentality!