The credit sector is down, however debt amounts are staggering. Payday loan financial debt seems like small potatoes by comparison. In fact, payday lending as an industry is tiny compared to the real players in the credit business. The entire cash advance industry does about $50 billion a year in loans. Charge cards, by the way, have over 20 times the loans lent out per year. A payday advance loan is far less a debt trap than the mainstream sources of financial debt that individuals are encouraged to get into.
Payday loans are not the cause of the $11 trillion debt trap
Mortgage lenders were said to be the biggest cause of the debt trap as outlined by fortune. In fact, there is $10.6 trillion in outstanding mortgage debt. Mortgages, if they are configured with prepayment penalties, are meant to keep people paying. Credit cards are, too. There is over $822 billion in debt from credit cards. To come up with the $1.6 trillion in debt left you’ve to add student loans, auto loans and installment loan. This debt is still lower than previous years.
Competing isn't even an option for payday lenders
The payday loans industry is 20 times smaller than the credit card industry. The total amount of all pay day loan lent out in a year is still under $50 billion. Furthermore, most studies of profitability of the short term loan industry indicate profits at the largest of payday lenders are 10 percent or less. Paydayloans are really a convenient and efficient choice for lending despite what people lead you to believe.
Not as big as you would think
Payday loans are such a small portion of the overall credit market, that seems like ridiculous to single them out compared to other sources of debt. However, payday lenders don’t have the benefit of multi-billion dollar ad campaigns. You can read more within the Payday Loan Facts and Statistics Report on Personal Money Store The Payday Loan Facts and Statistics Report on Personal Money Store can give you more details.
Articles cited
Finance Fortune
finance.fortune.cnn.com/2010/11/10/consumer-debts-wont-return-anytime-soon/
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