They are popping up all over the country like boils gone out of control. You’ve likely seen payday loan and check cashing stores at intersection corners all over your town. If not, consider yourself lucky to live in a community where consumer debt problems have not yet warranted the need for payday loan stores.
These stores are becoming almost as common as grocery stores. Actually, at an intersection near my home there is a place to get payday loans at EVERY CORNER!
There are many reasons why payday loan and check cashing shops are bad news for your community. The biggest problem that I see is simply that they are evidence that many of your neighbors are having some serious financial problems. Here are some problems that warrant the need to use one of these stores:
No savings
A person that has to resort to a payday loan to get by for a few days obviously has an insufficient supply of savings to cover emergencies. Instead of having a reserve to tap into, this person feels forced to get a payday loan to cover necessities for a few days. Of course, this can become a perpetual cycle. After receiving one payday loan, a person might find him or herself chronically short on money–paycheck to paycheck.
No bank
No person that has a bank should need to get a check cashed at a store. These stores, of course, charge you money to cash your check. A bank would never charge you money to cash your own check. Having a lot of people in our society without bank accounts is definitely a bad sign.
No credit or bad credit
Many of us have had financial emergencies where we just did not have the money to pay all of our bills or expenses. This happens more frequently to young couples or college students who are just starting out. Sometimes it might be necessary to use a credit card to pay for some of these expenses. A person that receives a payday loan obviously does not even have enough good credit to charge an emergency expense to a credit card. This person either does not have a credit card, or else his or her card is maxed out. Having a lot of people in our society without credit or with bad credit is also a bad sign.
To sum it up, payday loan and check cashing stores are bad news. Or maybe I am being way too uptight about this issue. What do you think?