During a routine car check-up, a service attendant announces to you that it will take $500 to repair your car. Normally, this cost wouldn't be a big deal, but this month you had to pay your income taxes, and you took a hit. To make matters worse, you're supposed to go on a road trip in a week. Where are you going to get $500 in time to get the car fixed?
You decide to head down to the place on the corner that advertises "Quick Cash Now." You've walked by it a hundred times but never had cause to go inside. You decide to give it a try. It's so easy! You're out the door in 15 minutes, and $500 will be deposited in your account sometime the next day. Sure, it cost you $50 in fees, but nothing beats that convenience, right?
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That convenience is a $40 billion-per-year industry in the United States [source: Kirchoff]. This is the industry of payday lending, and it's served by more than 22,000 locations nationwide.
In this article, we'll learn about the purpose of payday loans, as well as the drawbacks of these quick-cash offers.