Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

why are people saying that the cash advance and check into cash places are making the economy worse?

Answer Question
 
KelsoBabeyy

Asked by KelsoBabeyy at 6:55 PM on Oct. 16, 2008 in Politics & Current Events

Level 2 (4 Credits)
Answers (9)
  • Because the interest is so high. Consumerism is the basis of our economy. If you take away more of people's incomes, then they have less to spend. I'm sure a lot of people are falling into the cash advance trap to make end meet. It's one big snowball effect.
    sammygrl77

    Answer by sammygrl77 at 7:01 PM on Oct. 16, 2008

  • wow.... i cant believe i just asked that lol. DUH!

    lol thanks sammygrl77
    KelsoBabeyy

    Answer by KelsoBabeyy at 7:02 PM on Oct. 16, 2008

  • Yep, they are a dangerous trap. Once they suck you in, it's very hard to escape and until you do escape you have even less money to spend than before.
    kaycee14

    Answer by kaycee14 at 7:05 PM on Oct. 16, 2008

  • Many people are now facing the downside of a poor credit rating. These people still have every right to get a second chance at stabilizing their financial situation. In addition, if these people collectively stopped spending money the economy would freeze. This is why a payday loan does not hurt the economy. It keeps money in your pocket and helps you put money back into the economy. In a perfect reality all would be great, but in the end people have less to spend and more than likely have to go back for another and another until they have dug themselves a hole of debt and have no money to contribute to the economy and have to as for government assistance.

    ReachtotheStars

    Answer by ReachtotheStars at 7:06 PM on Oct. 16, 2008

  • Because you are borrowing money that you don't have. The more times you borrow, the less money you have in the end. Unfortunately our government does the same thing... rob peter to pay paul.
    dakotaNrye

    Answer by dakotaNrye at 7:19 PM on Oct. 16, 2008

  • I live in a place were they put a cap on the interest they can charge. Most have gone out of business, but I am glad. I knew a couple of people that got cought in the trap. They used to charge like 500% how did they expect people to ever pay it off.
    Anonymous

    Answer by Anonymous at 7:30 PM on Oct. 16, 2008

  • its not a dumb question! i didnt know all about it until i saw a news story a few weeks ago...payday loans and whatnot are from the neitherworld IMO
    ivelostmyself

    Answer by ivelostmyself at 7:39 PM on Oct. 16, 2008

  • Ok I work for a car dealership who specializes in getting customers financed with bad credit, yesterday a guy comes in with an old model 4x4 truck that he had a title loan on. Here is the problem with these companies, these loans mature every month at like 234% interest so this guy who borowed $5000 on his truck 6 months ago has been paying the interest of $960 a month and rewriting this loan every month just to keep his truck. That's why these companies should be put out of business. He has already repaid more than he borrowed and every month he owes $5960.00 or he can rewrite the loan for $960.
    SheriSanchez

    Answer by SheriSanchez at 7:50 PM on Oct. 16, 2008

  • Because when you borrow against your next paycheck you diminish that next check by however much you owed to begin with. Which leaves you in a position to need another loan two weeks later. It sets people up to slide farther and farther into the hole as time goes on, and to continue to live on borrowed money - which doesn't put anything in their pockets, it just extends the time before the shit hits the fan. The longer the time, the harder the hit in the end.

    Once borrowed money surpasses a persons ability to pay it back, then it starts to effect larger things, eg. the housing market as more loans fall through it affects a lenders ability to continue offering credit, and individuals lack the ability to pay down the credit they have when they've been playing the peter/ paul game.

    No matter how you cut the cake, you only have so many slices.
    Kestrel1

    Answer by Kestrel1 at 7:56 PM on Oct. 16, 2008

Join CafeMom now to contribute your answer and become part of our community. It's free and takes just a minute.