A payday loan is a short-term loan, intended to help people cover expenses and handle emergencies until their next paycheck comes in. But if you take a little spin around the web, you may come away thinking they are dangerous, addictive, and destructive – less like a personal loan, and more like a syringe full of heroin.
Is there any truth to this?
Here are a few real headlines from around the web
“Addicted to payday loans?”
“Payday Loan Addiction: A Simple Treatment”
(Go ahead, feel free to click through and give them a quick read. The blog will be waiting here patiently for you to return)
If you read something enough times, it will start to feel true even if it isn’t true. So if all these folks are saying loans are addictive, there must be something to it, right?
Payday loans have their advantages and disadvantages. They are not for everyone, and not right for every situation. An argument can be made against payday loans, but calling them “addictive” is inaccurate at best, and libelous at worst.
The Ugly Face of Addiction
To anyone that has dealt with alcoholism or drug addiction in their family, they know how painful a struggle it can be. But to those people who have never faced this personally, they tend to throw the word “addiction” around a lot. It is often confused with the word “compulsion.”
Drugs like heroin, cocaine, nicotine, or caffeine (just to name a few) create dependence in the user. The feel or “rush” they get from the product becomes normal, until they can’t function or be normal without the substance. When they can’t get the substance, they start to withdraw from it, which can entail physical as well as mental symptoms.
A payday loan doesn’t offer a “rush” just an advance on your next paycheck. There is no “withdrawal” there is simply paying back the money you borrowed. While a person may enjoy the benefits of a payday loan, and indeed can even come to depend on their availability, there is no basis for the term “addiction” here.
In this case, the word is used as an escape clause – when a person is addicted to something, they are no longer held accountable for their actions. It’s an evolution of the Blame Game: “It’s not my fault I made bad decisions… I was ADDICTED!”
But when “addiction” is used to describe such common life decisions, it’s a slight against those who battle real addictions.
Simply put, a person addicted to buying shoes on credit is not the same as a person addicted to crack.
Not all jobs are created equal. But even jobs that are good jobs are not exempt from being maligned or ridiculed. Take Janitors and cleaning ladies, for example, here are two jobs that are desperately needed, require hard work and long hours, and yet are given no respect. Car salesmen? No respect. Security guards? Gas station clerks? No respect.
And then there are certain jobs that are very important, and still attacked. How many times have you heard lawyers or attorneys referred to as “parasites,” or worse? For as many good, honest lawyers out there, a handful of overly litigious ambulance chasers smear the entire profession, and give people cause to refer to all lawyers as if they were bad people.
Like a lawyer, a payday lender is offering a service to a community that demands that service. Like a lawyer, a payday lender works in an industry alongside people who are sometimes less than scrupulous or honest. And like a lawyer, a payday lender is painted with a broad brush – accused of being a loan shark because others have given the job a bad name.
Don’t Believe the Hype
There is nothing illegal or immoral about payday loans. While some lenders might engage in underhanded tactics, or without key details from clients, most lenders do not use those practices. At their core, payday loans are little different from mortgages or car loans – it a service that loans money and expects you to repay it. No more, no less.
Like Chuck D so famously said “Don’t believe the hype.”
You cannot become “addicted” to payday loans. Through poor planning you might allow yourself to depend on them too much, but this is a far cry from addiction. You can also depend on Netflix for the latest seasons of your favorite TV shows, but that doesn’t mean you are “addicted” to Netflix, either.
The word addiction is becoming linked to the loan industry simply because it is an ugly word with strong connotations. When people refer to lawyers as “a cancer” they don’t mean it literally, they just want to link lawyers with something negative that everyone hates. By linking these words, they can create a negative connection in people’s minds. This is what people seek to do to payday lenders; it is simply a viral smear campaign, not only untrue, but also unfair.