Recent info about consumer debt loads suggests that a payday loan debt trap might be better for a person than mainstream debt. Customers borrow just under $50 billion a year from all payday lending firms. Given, $50 billion seems like a lot. However, Americans owe over 20 times that amount on credit cards. The worst part is that mainstream sources of financial debt are encouraged to acquire. That makes things like credit cards and mortgages far more of a debt trap than a payday advance ever could be.
Pay day loan are not the cause of the $11 trillion debt trap
According to Fortune, the mortgage industry does far more in business than payday payday lenders do. In fact, there is $10.6 trillion in outstanding mortgage debt. Both credit cards and mortgages have one thing in common, they are meant to keep people paying to them for long periods of time. The debt from credit cards alone is around $822 billion. To come up with the $1.6 trillion in debt left you have to add student loans, automobile loan and installment loan. This debt is still lower than previous years.
Pay day loans aren't even playing the same game
The credit card industry is far larger than the pay day loan industry. In fact it is 20 times larger. If you add up the total amount of each payday advance loan given out, you still would not hit $50 billion. Furthermore, most studies of profitability of the unsecured loans industry indicate profits at the largest of payday lenders are 10 percent or less. Pay day loan are actually a convenient and efficient choice for lending despite what people lead you to believe.
Smaller than expected
Payday loans are such a small portion of the overall credit market, that it seems ridiculous to single them out compared to other sources of debt. The credit industries make enough money to market to the masses and slander payday lender. When payday lenders don’t make enough money to fight back. To learn more for yourself, simply visit the Payday Loan Facts and Statistics Report on Personal Money Store.