Why should you avoid payday loans

A

alex 008

Member
Used to work at a payday loan/check cashing place these places are financial traps.

The interest rates are ridiculously high, and it’s way too easy to get stuck in a cycle. It honestly broke my heart to watch people from all walks of life walk in thinking this was a smart short-term solution. Every once in a while, someone would use the loan responsibly: they were in a tough spot, paid it off right away, and I never saw them again.
But that was rare.

Most people became regulars. Every payday, they’d come in, pay off their last loan, and immediately take out a new one just to stay afloat. Say someone borrowed $250 they’d come in on payday, pay $300, then borrow $250 again. Over and over. What that means is they were essentially paying $50 just to access their own paycheck. Do that biweekly for three months, and you’ve paid $300 in fees for nothing but the illusion of stability.

I tried helping where I could encouraging people to check with their bank or consider a credit card, which usually offered better terms. I’d talk with them, listen to their situations, and often it came down to poor budgeting or not having the tools to manage money better.

I get it emergencies happen, and sometimes these places feel like the only option. But if you’re thinking about going to one, please explore every other alternative first. Most people think they’ll be the exception. They’re not. I can’t tell you how many times I heard, “Don’t worry, I’ve got this under control,” only to see them back two weeks later and then again, and again.
Do your research. Talk to someone you trust. There are better options out there.
And no, I don’t work there anymore. Found something better and left.
 
Man i worked at one of these places too and left for the same reason. It was soul-sucking. Watching people essentially sell tomorrow’s paycheck for scraps today broke me. The worst part? Most of them weren’t irresponsible—they were just stuck. Kids to feed, rent due, and nowhere else to turn. And every loan just dug the hole deeper. Predatory is putting it lightly.
 
This honestly made me tear up a little. My mom was caught in this exact cycle when I was a teen. She’d get a $300 loan, pay $360 on payday, then take $300 again just to keep groceries on the table. We lived like that for almost a year. It wasn’t laziness. It was survival. These places prey on desperation and shame. I’m so glad you walked away from that job.
 
I remember being 22, broke, and taking out a payday loan to cover my car repair. Thought I’d just pay it back in two weeks. Spoiler: I couldn’t. Took me 6 months, 5 renewals, and hundreds in fees. It destroyed my credit for years. If I’d just put it on a credit card, I’d have paid a fraction of that interest. Never again.
 
I get that they're sketchy but is it always a trap? Like if you know 100% you'll pay it back in 2 weeks, what’s the harm? Not saying it’s ideal but not everyone can qualify for a credit card or personal loan. Just playing devil’s advocate here.
 
I feel that. I’ve used one ONCE during grad school when rent and tuition collided horribly. I paid it back on time and avoided fees. But it was incredibly stressful and i still regret it. The temptation to roll it over is real when money’s tight. I wouldn’t risk it again even in emergencies.
 
The real issue is how normalized this is in some communities. I grew up thinking these places were just what adults do when things get tough. Nobody told us about credit unions or emergency savings. It wasn’t until I hit my 30s that I realized how deep the system is rigged against poor folks.
 
One of the sneakiest things they do is not explain that your fee is actually equivalent to like 400% APR. If a bank tried that, it’d be a scandal. But payday loan places? Totally legal in most states. People need better financial literacy AND better regulation.
 
Y’all don’t know the half of it. Back in the 90s, i took out a $500 loan after a layoff. It turned into a $2,000 nightmare over 6 months. The math don’t math… until you realize it’s by design. I’m still salty. These places shouldn’t even exist.
 
I once sat in my car for 20 minutes debating whether to go in. My account was overdrafted, my fridge was empty and rent was due in 3 days. I ended up calling a friend and swallowing my pride. They helped. If they hadn’t? i’d have been trapped. I still think about how close i was.
 
I like how payday loan places are called Cash Now but should really be called Broke Forever. Like thanks for the $300 now i owe you my soul and a kidney.
 
To anyone reading this thinking but i’ll be different.....you won’t. Life happens. Cars break, hours get cut, bills pile up. And when payday comes, your check’s already spent. I’ve seen it firsthand. It’s like quicksand with a neon Open 24/7 sign.
 
I’m not even ashamed to say i ate rice and canned tuna for a month just to avoid taking out another payday loan. That pain was preferable to being stuck in that cycle again. These places sell you a solution that ends up being your next problem
 
Can confirm. Used to work for a small bank. We had clients come in who were constantly broke, even though they made decent money. Turns out most of them were in payday loan loops. We’d run the numbers and it was like, You’ve paid $1,800 in fees this year... for nothing.
 
My ex took out a payday loan without telling me. We had a joint account, and they started pulling auto-payments. Took us months to unwind that mess. I was livid. It’s not just risky..it can mess up relationships too.
 
I always thought just make more money was the answer until I had a kid. Then i realized poverty isn’t about laziness....it’s about math that doesn’t work. You can’t budget your way out of a system where rent is $1,200 and your check is $1,300.
 
Payday loans are like that sketchy friend who always says trust me right before things go horribly wrong. If someone’s plan starts with a payday loan, it’s probably not a plan. It’s a pan
 
I remember trying to explain to my dad why I didn’t want him using payday loans anymore. He just didn’t get it. “They helped me before, he said. But he was always behind. Always catching up. Never ahead. It’s like running on a treadmill while sinking in quicksand.
 
Let’s be real. If payday lenders actually helped people, they’d be out of business. Their whole model relies on people being desperate and coming back. Over and over. The rare one-time user is a fluke. The system needs broken people to survive.
 
Lenders used to call customers on payday, reminding them to roll over their loans. It was basically encouraged. I worked at one of those call centers for a month. Quit when i realized i was just a glorified debt pusher.
 
You must log in or register to reply here.
Back
Top