Payday Loans Put Families in the Red
Payday loans create a cycle of debt that diminishes the income of vulnerable households Marketed as short-term relief for a cash crunch, payday loans carry annual interest rates of 400 percent and are designed to catch working people – or those with a steady source of income such as Social Security or a disability check – in a long-term debt trap. The terms are set so that borrowers most often cannot pay off the loan on payday when it's due without leaving a large gap in their budget, often forcing them to immediately take out a new loan after paying the first one back. One recent study found...