Easy credit keeps me employed. I have been working in the insolvency industry for about 25 years and if credit weren’t easy to come by, I would be out of a job. On the way into work I listened to an advertisement on the radio from a company that advertises easy credit. The ad was very convincing, it almost had me, cynic that I am, sold, “money for braces” for the kids, “money for vacation” and other somewhat glamorous or desirable purchases.
The reality is the easier the credit the more expensive it is. Some finance companies advertise “easy credit” for people with “bad credit”, “no credit” or even “bankruptcy”, and charge up to 59% interest for their loans. Payday loan companies now offer credit cards, and lines of credit in addition to cheque cashing services, all at very high rates of interest.
I recall as a kid a great motivation for working was getting together with friends for a pint of beer and a game of darts on the weekend. In fact, when guys were broke and unemployed, the closer they got to the weekend the more motivated they became to scrape up some money, from somewhere, anywhere!
There are some fringe members of society who have irregular employment but regular bills who use cheque cashing services. Partly because banking can be quite expensive, partly because of bad credit no overdraft protection is available and, in some cases, they have kited cheques through ATMs and the banks have closed their accounts. But many of the people using payday advances are just poor and each month they slip further and further into “easy debt”.
Given that more than half of all Canadians struggle to meet their basic needs on their income alone it should be no surprise that the “easy credit” companies are able to thrive.
I love listening to easy credit advertisements because, although it should be avoided at all costs, it sounds so attractive, the notion of having access to money, especially when you are broke, has tremendous appeal. If only selling insolvency services – helping people to get out of debt and stay on track with a proper budget isn’t sexy but it sure can improve lives.