Compared to bank charges, payday loans are cheap... Bounced checks involve no loan and you still get the high fee. And of course, these fees add up very fast. It really sucks to pay $35 on a $2 check that bounces.
Many poor people don't have bank accounts at all. So credit cards aren't really an option.
Further, the federal government has paased so called consumer protection laws that limit peoples power tobdispute credit report errors... Which means more people have bad credit, especially poorer people who are probably less likely to challenge their reports. Many organizations that do not extend credit get to report on credit reports, and a disputed debt that goes tobcollections can show up on a report a half dozen times from different agencies as if they were separate debts!
If government wanted to fight payday loans, a more effective solution would be to make credit reporting companies liable as they used to be, if they report information that they know is wrong.
Many poor people don't have bank accounts at all. So credit cards aren't really an option.
Further, the federal government has paased so called consumer protection laws that limit peoples power tobdispute credit report errors... Which means more people have bad credit, especially poorer people who are probably less likely to challenge their reports. Many organizations that do not extend credit get to report on credit reports, and a disputed debt that goes tobcollections can show up on a report a half dozen times from different agencies as if they were separate debts!
If government wanted to fight payday loans, a more effective solution would be to make credit reporting companies liable as they used to be, if they report information that they know is wrong.