Economy

Payday loans: Fast cash, expensive debt trap

There are times when Glenda Powell is desperate for money.

When cash runs short, she first looks to her daughter or mother for help. Then, if she must, she turns to a payday lender.

Dozens of these no-frills storefronts all over the Fresno area will let people borrow against their next paycheck -- for a price. A big price.

"It's my last resort," said Powell, a 48-year-old hospital worker from Fresno. "If they don't have the money, I go to the payday loan."State law limits payday loans to $300, but nothing says you can't borrow against the same paycheck from more than one company or renew the debt repeatedly. With the loans typically carrying annual interest rates of 460%, that can mean trouble.

"I've had up to four loans at one time," she said. "The situation was bad, and I got deep into it. ... You get into a cycle where you pay this one back, then reborrow. That's how I was doing it for a while, and not making enough money to pay my rent or my bills."

Read the complete story at fresnobee.com

  Comments