For many American families, credit can be hard to come by. Some rely on payday, or short-term loans when an unexpected expense arises. Others seek help from family, friends, or social service agencies. The decision to seek a short-term loan can be complicated, given the high interest rates involved and the consequences faced when the loan cannot be repaid. But alternatives are few and far between, making such loans a necessity for those who don’t have good credit or even a bank account.
The MCC will be reporting more on short term loan issues in the coming weeks. For more background on this issue, please see this story, which provides a glimpse into the financial decisions made by the unbanked in New York City. For many, micro credit organizations like those featured in this video offer a necessary alternative to traditional banking.