Even with a down credit sector, customer financial debt amounts make a payday loan debt trap seem like tiny potatoes. Customers borrow just under $50 billion a year from all payday lending firms. The credit cards industry does over 20 times the business payday loan providers do. Mainstream financial debt is encouraged and seen as the advantage, which makes it more of a trap than any payday loans ever might be.
$11 trillion in debt and it's not because of payday loans
Mortgage lenders were said to be the biggest reason for the debt trap as outlined by fortune. $10.6 trillion is debt from mortgages alone. Mortgages, if they’re configured with prepayment penalties, are meant to keep people paying. Credit cards are, too. There is over $822 billion in debt from credit cards. If you were to combine short term loan, auto car loans and student loans you have a total of $1.6 trillion in debt. What is amazing is that this debt is reduced from earlier years.
Payday lenders don't even have a chance to compete
The credit card industry is far larger than the payday loans industry. In fact it is 20 times larger. The sum total of the all cash advances and pay day loans lent out is less than $50 billion per year. Profit made by payday lenders is on average around 10% a year, which is much less than most lending industries. With such small margins for profit, according to the research that has been done, there is no way that any cash today is nearly as bad as critics contend.
Single star in a galaxy
If you did your homework you would know that a payday loan is very different than a credit card and other varieties of borrowing. However, payday lenders don’t have the benefit of multi-billion dollar ad campaigns. You can read more in the Payday Loan Facts and Statistics Report on Personal Money Store The Payday Loan Facts and Statistics Report on Personal Money Store can give you more details.
Articles cited
Finance Fortune
finance.fortune.cnn.com/2010/11/10/consumer-debts-wont-return-anytime-soon/
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