I read a report recently that talked about payday loans. The issue is that the people who take them out are likely to default a lot so the rate has to be high.

I read a report recently that talked about payday loans. The issue is that the people who take them out are likely to default a lot so the rate has to be high. Most of these companies make almost no profit. Now, my first thought was good! They are so predatory. But what the report talked about was that in that case, these people still need the same amount of money and instead turn to loan sharks and organized crime which put them in an even worse position. At least with a payday loan, there is bankruptcy courts to protect them and no one is physically harming them or their families. I hope I never end up this desperate but it is a more complicated situation than it first appears. The old adage is true, being poor is expensive. This is largely driven by transportation issues. They can't get to the wholesale club or save enough to buy in bulk. Instead they buy toilet paper one $3 roll at a time at the local CVS or bodega.