In light of a survey that was done earlier this year by 1500 users of payday loans, the Financial Consumer Agency of Canada made a report concerning their findings from the survey. In the discovery, it revealed that those using the payday loans are not aware of the high price that comes with using the loans. Only about 43 per cent know that getting a cash advance on a credit card would be a cheaper option.
65 per cent of those that were surveyed is not in possession of a credit card, while another 88 per cent does not have any line of credit whatsoever, as a result of them not being able to access traditional credit merchandises. Lucie Tedesco, commissioner of the FCAC mentioned; “Payday loans are an expensive way for consumers to borrow money. The uptake of these short-term, high-cost loans has more than doubled in Canada recently, to four percent of Canadian households. This is, in my view, a trend that merits more attention.”
The majority of the payday loans users earn low-to-moderate incomes on a daily basis, 20 per cent received had $80,000 and above worth of income, with 7 per cent with incomes of more than $120,000. Most of those that use the payday loans said they do so in order to have their essential need and expenses settled.