The Big Business of Poverty

In this installment of our Poverty Series, we talk about the big business of poverty.

Poverty is a big problem in the United States (and elsewhere as we’ve illustrated through this series) however, for the wealthy, poverty can be a big business.

The Tyranny of Payday Loans

You’ve seen the shops around town. With bright colors and catchy signs, payday loan locations offer banking services to those disenfranchised from the larger banking system. They will cash checks for a fee, even personal ones, and most importantly, they will offer you credit when you can’t obtain a credit card. However, it comes with a catch and that is the terribly high-interest rates that they charge. Interest rates on payday loans can range up to $500 of the amount borrowed. This can trap people in a cycle orpaying off and reborrowing again and again with more fees each time.

People can get sucked into a cycle of debt that they can never escape. What is even worse is that there are regulations to stop this and lawsuits have resulted in massive settlements to borrowers who have been screwed over by these sort of deals. It is predatory lending at its worse and it makes companies like Ace Check Cashing, Cash America, and other local chains who specialize in this business. It’s a cycle of debt, depression, and misery that afflicts the poor who take advantage of these services.