USA Today: Payday Loans Can Get Out of Control
For someone who can't pay a cellphone bill or the rent, it might seem perfectly reasonable to dish out an extra $42 to get a $300 two-week advance on a paycheck in Michigan.
After all, you'd be able to pay the bills, keep your service and avoid extra late fees.
Alex Horowitz, research manager for Pew Charitable Trusts in Washington, D.C., maintains that many people end up getting trapped in a payday loan cycle that lasts closer to five months or more.
About 27% of those surveyed in the Pew Report said a payday lender making a withdrawal from their bank account caused an overdraft, according to Pew's report.
Lenders are able to automatically withdraw payments from borrowers' bank accounts.
Only 14% of those surveyed in the Pew report said they can afford to pay more than $400 toward their payday loan debt in a month, the report noted.
Read the full article at USA Today