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Barbara Ehrenreich wrote an excellent book, "Nickel and Dimed," on how exhausting and precarious the lives of poor (= minimum wage-earning) people are, based on

Barbara Ehrenreich wrote an excellent book, "Nickel and Dimed," on how exhausting and precarious the lives of poor (= minimum wage-earning) people are, based on her experience trying to live off minimum wage. In my life, I have been dirt-poor (homeless) and pretty well-off ($200k/yr), and my experience agrees with her reporting. Financial predators seek out the poor because 1) there are lots of them; 2) they don't have a lot of effective defenses; and 3) society, and poor people themselves, tend to blame the poor for their poverty (as the parent comment mentions). I have a running dad-joke with my kids that "I'm not smart enough to be poor." The truth is, I'm not hard-working enough either. Being poor sucks. The poor know it. Many of them are as smart and hard-working as the statistical "us" are. I wouldn't be surprised if there's a correlation between financial literacy and revolutionary attitudes about changes to the economic status quo.

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wcunning 5y ago
Planet Money or something similar did some interviews with people who use payday loan/check cashing places and asked them why they don't just have a normal bank account. Pretty much to a person they said it was because the fees that the payday lender charged were smaller than the banks and more predictable because they (or their brother or uncle or whatever) got charged an overdraft and then a convenience fee for an account below minimum balance and then and then and then and it all turned out to be way worse than just paying for a single financial service. Most of the "unbanked" are just as intelligent and rational as you or I, but for other reasons choose not to get entangled with the banks.
- pathseeker 5y ago
  > got charged an overdraft and then a convenience fee for an account below minimum balance and then and then and then and it all turned out to be way worse than just paying for a single financial service. That's a fun anecdote but it falls right into the illiteracy problem. There are tons of normal banks now that allow you to opt out of overdraft (all of them might now might even be legally required to offer that as an option). You've inadvertently just shown why financially illiterate people end up way worse off (someone using a payday lender because of a story they heard from their uncle from a bank 20 years ago).
  - heavenlyblue 5y ago
    > You've inadvertently just shown why financially illiterate people end up way worse off (someone using a payday lender because of a story they heard from their uncle from a bank 20 years ago). I am not sure this is true. In order to know what you know you need to have free time to actually follow the changes in bank rules, for example. A person with a financial education from 20 years ago who is also poor today would not know that the overdraft is optional.
  - specialist 5y ago
    IIRC, Overdraft protection is a premium service, requiring depositor maintaining minimal balances. A better answer is zero-fee check cashing services. Charging people money to use their money is evil.
- ixacto 5y ago
  This is illogical, I don’t buy their argument. Just open up a bank account that doesn’t have fees and use that.

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wcunning 5y ago

Planet Money or something similar did some interviews with people who use payday loan/check cashing places and asked them why they don't just have a normal bank account. Pretty much to a person they said it was because the fees that the payday lender charged were smaller than the banks and more predictable because they (or their brother or uncle or whatever) got charged an overdraft and then a convenience fee for an account below minimum balance and then and then and then and it all turned out to be way worse than just paying for a single financial service. Most of the "unbanked" are just as intelligent and rational as you or I, but for other reasons choose not to get entangled with the banks.

pathseeker 5y ago
> got charged an overdraft and then a convenience fee for an account below minimum balance and then and then and then and it all turned out to be way worse than just paying for a single financial service. That's a fun anecdote but it falls right into the illiteracy problem. There are tons of normal banks now that allow you to opt out of overdraft (all of them might now might even be legally required to offer that as an option). You've inadvertently just shown why financially illiterate people end up way worse off (someone using a payday lender because of a story they heard from their uncle from a bank 20 years ago).
- heavenlyblue 5y ago
  > You've inadvertently just shown why financially illiterate people end up way worse off (someone using a payday lender because of a story they heard from their uncle from a bank 20 years ago). I am not sure this is true. In order to know what you know you need to have free time to actually follow the changes in bank rules, for example. A person with a financial education from 20 years ago who is also poor today would not know that the overdraft is optional.
- specialist 5y ago
  IIRC, Overdraft protection is a premium service, requiring depositor maintaining minimal balances. A better answer is zero-fee check cashing services. Charging people money to use their money is evil.
ixacto 5y ago
This is illogical, I don’t buy their argument. Just open up a bank account that doesn’t have fees and use that.