I’ve read in many places that payday lenders are responsible for “sucking billions of dollars out of the pockets of consumers”.  That got me thinking about something I bleeped over in an earlier post because I took it for granted.  The people who make this accusation do so with an implicit assumption that consumers get nothing in return for the fees paid to a payday lender.

Except that’s not true.

They do get something in return.  They get something just like anyone else who spends money on a product.

In this case, they get credit.

They pay $45 in exchange for $300 in credit to spend as they wish.

And yet, these same opponents don’t say anything about “those banks suck trillions of dollars out of the pockets of mortgage holders”.  If you take out a mortgage, you pay for that mortgage with interest.  You get a giant bulk of credit in exchange for the interest you pay over a very long period of time.

So what’s the difference?  Why is it that critics level this charge against payday lenders but not other forms of credit….especially when the charge isn’t even true?  It stems from a prejudice against payday lenders – a “pre-judgment” that I’ve discovered has no basis in fact, only emotion.

So stay tuned and I’ll address why this is such an emotional issue.

Be Sociable, Share!