How Millennials Are Getting Hooked on Payday Loans and Pawnshops
According to a joint study by Pricewaterhouse Coopers, or PwC, and George Washington University, 28 percent of college-educated millennials (ages 23–35) have used payday loans and pawn shops to secure short-term financing over the last five years. As reported in a January 7 article from Reuters, these millennials defy the stereotype of the alternate credit user. These are middle-class young adults with credit cards and checking accounts who should have other options. However, excess student loan debt and high credit card balances often make bank loans hard to get.
The study also found that half of the subjects surveyed said they would not be able to come up with $2,000 for an emergency in the next month. Nearly 30 percent were overdrawn on their checking accounts and more than half carried a credit card balance. Many millennials simply have not come to terms with the fact that they don’t earn enough to live a middle-class lifestyle. Yet, believing they are entitled to the amenities they grew up with, they push the envelope on the debt they carry, creating a potent, ticking debt-bomb.
At DebtStoppers, we know that payday loans and pawn shops are no way to deal with your debt problems. The interest rates are way out of proportion. For example, the Reuters article notes that a young man had hocked enough jewelry to owe the pawn shop $16,000 — at four percent interest per month. In one year, that would amount to $7,680 in interest alone!
Whether it’s pawn shop loans or credit card balances, high interest rates can easily drive you deeper and deeper into debt. It you’re ready to defuse your debt time-bomb, an experienced bankruptcy attorney at our firm is ready. We are DebtStoppers, and we can help you get a fresh start financially as we have helped thousands of others. Call our Chicago bankruptcy law firm today at 312-913-0630 or contact our office online to schedule a free consultation.