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| FORT WORTH — With more people strapped for cash than ever these days, payday loans have become big business.It’s reached the point that Fort Worth is now home to more payday lenders than banks and credit unions.Payday lenders are cashing in as North Texans who are down on their luck try to stay ahead of bills. If you’re in a pinch and you need a few hundred bucks in cash, you can get it — immediately.But if you can’t repay that short-term loan, you’re looking at a debt trap. Interest is calculated at rates reaching nearly 400 percent annual percentage rate.
At Cash America, the fees are all listed up front: $18 for every $100 loaned. On a typical $300 loan, you’re looking at fee of $54.
But falling behind will cost you, a slippery slope that critics say isn’t worth the gamble. Cash America spokeswoman Yolanda Walker disagrees, saying payday loans fill a need for those in dire straits. “Where are they going to go if they run into an emergency situation where they need cash quickly, and they don’t necessarily have good credit?” Walker asked. “You can’t go to your bank; they’re not going to give it to you. You can’t go to your credit union; they’re not going to give it to you.” Even so, one woman who fell behind said what started as a $300 loan for her ballooned to $8,000 as she went from payday lender to payday lender trying to get caught up.. Last year, Congress acted to cap the loans given to members of the U.S. military at 36 percent APR. Texas is one of the few states with no regulations concerning payday lenders. In states that have established rules to limit interest rates, there has been a decrease in the number of such establishments. |
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