Tuesday, January 6, 2015
Montel Williams, Payday Loans, and the rigged economic system that keeps the poor poor
So you wake up one morning, walk into your kitchen, and step in a puddle of water.
Guess what? Your refrigerator is dead. Gone. It's full of perishables and you need a new fridge. Today.
So, what do you do? That depends entirely on your financial situation.
If you're rich, you call Sears or Best Buy or whoever and you order a new fridge for $1000. You pay cash, which means the fridge costs you $1000.
If you're middle class (the definition of "middle class" in this country is "a poor person who thinks he's doing well because he can pay the bills and has credit) you pull out your VISA card and order a new fridge. You pay $150 a month because that's what you can afford. In seven months you've paid for it, and it cost you $1050.
If you're poor, you don't have cash and you don't have credit, so you go to Rent A Center or Aaron's and you sign a contract which requires you to make monthly payments of $69.99 for two years for your new fridge. If you miss a payment, you'll get hit with a $40 charge. If you miss a couple of payments, the fridge will be repossessed and the money you paid into it will be lost. If you make all your payments, in two years you'll be out $1680 you paid for the same $1000 refrigerator the rich guy and the middle class guy got. See how much fun it is to be poor? See how easy it is to get yourself out of the situation of being poor?
Which brings us to scumbag Montel Williams and this revolting pimping for this company which doesn't call itself a Payday Lender though that's EXACTLY what it is. "Would an extra thousand dollars be handy?" Hmm-- if my refrigerator is broken, a thousand dollars is definitely what I need, but I wouldn't use the word "handy" where "essential" is much more accurate. And "standing in line" behind other poor people in dire straits certainly would be annoying- but you know what, that's not a problem compared to paying 300% interest on a short-term loan.
In case some people out there aren't aware, here's how Payday Loans work- you go to one of these loan sharks and prove that you have a job, usually by providing a cancelled paycheck or pay stub. Then you write a check for the amount you need to borrow, plus the usury-level interest rates required by the scumbucket leech Payday Loan company. You get the money you need for the emergency (more about this in a moment) and now you are in even worse shape economically, because if you can't cover that check in a few weeks, guess what? Time for another Payday Loan. Economic death spirals are fun, aren't they?
These commercials rarely talk about people facing actual emergencies (like my broken refrigerator example.) Instead, they show grinning idiots moaning that "there's a concert in town and I'm out of money" or "I need extra cash for Christmas," I think because they don't want to anger the audience by showing people being taken advantage of by Payday lenders - it's easier to shrug at these money-changers when their customers are presented as people who are stupid and frivilous with money anyway (hey, if you are really willing to risk your car title or next paycheck because you simply must see Katy Perry on Saturday night, why do I care about you? Fools and their money, after all...) So we won't see "John will be evicted if he doesn't have rent money tomorrow" or "Sue really needs to get the heat turned back on so her kids don't freeze to death" stories. Because then we'd turn our anger on Mr. Williams and his We Are In Business Because You Are Poor sales pitch. ("Designed with you in mind?" Probably the most honest part of this ad.)
One more thing about Payday Lenders* before I end this (completely justifiable) rant- they rely on people with bad credit to stay in business. So they don't report to credit bureaus when customers make their payments on time (because that would improve credit scores, and why would Payday lenders want to do that?) They aren't required to, so they don't. How does that gell with the "we care about you" message Montel Seriously Go Die Already Williams is shoveling at us here?
*I've never used Payday Loans, Rent A Center, Aaron's, Liberty Tax, or any other organization that preys on the poor. In fact, my credit score is extremely high. But I do enjoy researching stuff like this, and am well aware that "there but for the grace of g-d go I" is a good thing to keep in mind for everyone.