The Issue of Payday Loans

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Recommended: Short essay on ways of increasing financial literacy

One cold morning Sam Black woke up with aching chest pain. Troubled by this new condition he went to see his Heart Doctor. Little did Sam know that hours later he would be lying on the operating table in route for a triple bypass surgery. The surgery went as planned, but it was not the last of them. Sam was sent to many specialists and rehabilitation centers, building a large bill, which they had no money to pay them with. He still pays several grand a year for the medication he is prescribed. Years after the operation Sam and his wife, Elsie, have narrowly escaped foreclose, however the most problematic debt they have is the hundreds of small term loans with interest rates in the triple digits. Elsie once said in an interview regarding the loans they had to take out, “You can’t really keep up with them” (Wright, 2011). Almost a decade later Sam has trouble speaking and has to carry around an oxygen tank. This is a normal couple that got caught in the continuous cycle of payday loans. Like other millions of Americans The Black family settled for shady overpriced short-term loans.
Those who struggle with poverty know that there are few opportunities for change and ways to get money. With a growing poverty threshold resulting in massive amounts of poor people living in inadequate living conditions, it makes it hard to obtain the essential life necessities. Many factors lead to this steadily growing tragedy. Many of those who live in poverty have few resources necessary for them to acquire money, resulting in the decision to get cash through payday loans, or quick cash. Despite the amount of money Payday Loan Companies lend to lower classes, they actually cause more harm to those who receive assistance than it actually helps them. ...

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...reenberg, J. (2013, November 21).Service members left vulnerable to payday loans. Retrieved from New York Times
Eitzen, S., & Smith, K. (2009). Experiencing poverty. (2nd ed., pp. 1-5). Pearson.

Jost, K. (2012, January 20). Financial Misconduct. CQ Researcher, 22, 53-76.
Melzer, B. T. (2011) The real cost of credit access: Evidence from the payday lending market. The Quarterly Journal of Economics.
Mumford, K. (2012). A Bayesian Analysis of Payday Loans and their Regulation. In: Yacine Ait-Sahalia, Jianqing Fan, Han Hong, Cheng Hsiao, Peter Robinson (ed), Journal of Econometrics. 1st ed. Amsterdam : Elsevier . pp.205-216.
Peterson, H. (n.d.). 6 Outrageous Facts That Show How Payday Lenders Screw
Consumers. Business Insider.
Wage slavery. (2013, November 15). Retrieved from Wikipedia

Wright, K. (2011). Bad credit how payday lenders evade regulation. Nation.

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