Payday lenders have spread across the globe with their offers of short term, immediate loans, either helping those who are in dire need for the credit that banks refuse to offer, or feeding off of the poor and desperate, depending on who is looking at it and why. Most of the Payday controversy comes out of the UK, the USA, Australia, and South Africa. Across the pond a teacher from Reading, Ohio recently decided to take his students out on a field trip. His mission: to show these young adults that pitfalls of the dreaded Payday and Pawn shop industry. Packing 40 odd students into a bus, they set off to visit the world of quick cash.
Mr. Page is the economics teacher at one of the local high schools and as is faced daily with the struggle that his students go through to survive. Many have served prison sentence, some are already parents or have to work after school to help their families financially. Part of this teacher’s mission is to instill sound financial values in these kids; good saving habits, the need for a great credit rating.
The first stop is LoanMax, a short term lender where you can use your paid off car as surety. The students were informed that the interest rate for a short term loan would be 24.99% and that should the client default on even one payment, the car could be instantly repossessed.
Second stop is CheckSmart. The welcome is not very enthusiastic to say the least and when the students begin to ask about Payday lending and tax refund anticipation loans they are informed that the manager is not available to answer their questions.
Third stop is at CashAmerica. This establishment is bustling with activity. It is Friday and everyone is in to pay on their loans. There is an array of goods that have been used to pay off loans on sale. Here a friendly member of staff happily explains how things work at CashAmerica. She mentions that most of the repossessed goods on display are bargains worth looking at should one be shopping for hi-tech equipment, jewelry or other valuables. Interestingly it is here that the kids meet a somewhat ethical approach to the Payday loan industry. As they leave the establishment they are strongly urged to protect their credit scores.
Mr. Page is amazed, “I was taken by her honesty. She said that this is where you go when you’re in trouble, and she worked there! Everything in there had been taken from somebody.”
The day ends back at the school library where a representative a Credit Union as well as one of the local banks came to address the students. Finally the students fill out a work sheet with resources and information on the different Payday, Pawn, and Quick Loan options on the market today.
It is innovative teachers like Mr. Page who can really make a difference by educating the public on how to use these services, when to use these services, and how not to get into difficulty by taking out cash loans when one shouldn’t do so.