It’s no secret that the economy is in dire straits right now. The mortgage crisis still looms large over many homeowners, the cost of living becomes more and more prohibitive, and gas prices are through the roof. Middle-class consumers who once had a plethora of financial products available to them may now have startlingly few options as their credit scores plummet in this economy. As a result, traditional lenders, who are also hurting because of foreclosures and other loan defaults, may be less inclined to lend to anyone with less-than-perfect credit. When these traditional financial doors shut, where should cash-strapped consumers turn? Payday loans are one viable option, which is what may make them one of the economy’s last hopes.
What Payday Loans Have to Offer
Payday loans can help those struggling in this tough economy in a number of ways:
- Help consumers who are maxed out. To keep up with the cost-of-living increases we have experienced recently, more and more consumers turn to credit cards to make ends meet. Consequently, many cardholders find themselves maxed out, or using 100% of their credit capacity. In the event that this occurs, the consumer cannot turn to traditional lenders for a loan. However, payday loans are still a possibility for short-term cash needs.
- Alternatives for those with poor or no credit history. It’s not difficult to ravage your credit in these adverse economic conditions. With poor credit, though, it can be almost impossible to get a traditional loan. But because payday loans look only at monthly income, even those with poor credit still have a chance to qualify.
- Pay for fuel costs. For most Americans, gas prices are rising much more quickly than their incomes ever will. Inevitably, then, some Americans will occasionally come up short on cash for gas. Payday loans come in denominations as small as $100 and as large as $1500, in most cases. You can use a payday loan to cover your transportation costs until your next paycheck comes in.
- Discretionary spending. When the country is on the brink of recession, most consumers have a tendency to pull back, tighten their belts, and cut down on discretionary spending. This actually hurts the economy overall and can even contribute to a recession. By using a payday loan, consumers can buy the “luxury” items they might not otherwise be able to afford. In doing so, the borrower helps keep consumer spending up and perhaps even keep the recession at bay.