On July 1st, pay day lenders charging triple digit interest rates will not be allowed to operate in the state of Arizona. I say good riddance to these crooks!
I once highlighted a new blogger who had entered the vicious cycle of a payday loan. I never liked the idea of pay day loans, but ever since reading his story I have been convinced they were not in the business to “help people”. They are in the business to make money from people who don’t know what they are getting themselves into, plain and simple.
Pay day loans are a bad idea. Why? Because people who use them do not have the money to pay the loan, come pay day. These people are living from paycheck to paycheck. If all your incoming money is going for your bills, how are you going to pay back a payday loan?
I can’t imagine anyone using a pay day loan establishment as the first choice. I would hope you would use available credit, ask for a loan from your family or friends, sell something on eBay, or just do without. If you have exhausted all ways to come up with the cash, then you’re going to have to do without.
It’s bad enough to supplement your income with credit cards and pay only the minimum, going in the hole every single month.
Let’s say your washer breaks. You’re living pay check to pay check and you don’t have no money at all to have this one repaired, or buy a new one. If you take out a loan against your next paycheck, that means you can’t pay the allotted bills that are due with that paycheck. Plus, you owe exorbitant finance charges. What do you do? You’re washer is broken. You can’t wash your clothes. Well, you can do like Mr. A and I did for several months when we were young. Our washer broke and you know what we did? We filled the bathtub with water and washed our clothes by hand. We rung them out and hung them on a rope in the backyard. We had two young children. We didn’t have a car at the time, and we lived one half mile from a laundromat. But we chose to save our nickels and dimes washing our clothes by hand to buy a used washer when we finally had enough money. We could have asked for money from our parents, but we didn’t.
Let’s say your car breaks down. Most likely you live in the city with public transit available. If you don’t have the money to fix your car, you’re going to have to ride the bus. But your kids can’t get to soccer games, you say. Well, either take them out of soccer for this season, or find a parent on your child’s team to pick up your kid. You say you can’t get your child to school on time? Enroll your child in a school closer to your home. Or walk your child to school, or ask a neighbor to drive your child until you can get your car fixed. Or have your child walk to school! I walked to school over two miles through almost every grade. We always lived just a little bit too close to the school to be transported. Imagine that. Walking two miles a day to and from school. Certainly not through snow, living in Arizona, but it gets mighty hot come the end of May.
Did you say your stereo system or your television broke? Wow, you’re going to have to do without for a while. Once you’ve saved up some money, check your local second hand store and buy a system there. Or, go to Walmart or Kmart and put one on layaway. That way you can pay a little every payday after you pay all the rest of your bills, and then you’ll have your system.
Don’t you dare tell me you had to do it because you were out of food. I better not hear anyone saying they took out a pay day loan because they were out of groceries. In that case, you’re going to go through your home, scrape up every cent you can find and buy a few pounds of pinto beans. You can live off that until pay day.
But my credit is bad, I don’t have any credit cards. Well, I tell you what. You are just going to have to live without the thing you thought you had to have with
Pay day loans enable people to think they can have something even if they can’t afford it. I can’t think of a legitimate case for ever using a pay day loan company. The companies say people are going to be hurting here in Arizona because they no longer have the option, and cannot renew with a new payday loan.
It’s going to be hard at first. I just hope the pay day loan establishments don’t send over some hulk of a guy to break legs. It’s going to be cold turkey. The people caught in the vicious cycle are going to stop whirling around re-upping the loan every pay day until they’re dizzy. They are going to have to take a close look at their finances. They are going to have to cut corners. They are going to have to wash their clothes in the bathtub and eat beans. But in the end, they will be grateful that Arizona put a stop to the never ending cycle that may have ended only with them having to file bankruptcy.