Wonga made borrowing too easy – none of us will mourn its demise | Patrick Collinson

The payday lender went a long way towards creating demand, not just satisfying it

It was the 1980s, I was drifting in and out of low-paid jobs, and near constantly broke. When the cash machine wouldn’t shell out any more, when the credit card was maxed out, my last resort was a shabby exchange bureau near Oxford Circus. They would accept me writing a cheque for £50 with a cheque guarantee card (remember them?). We both knew it would bounce. But the guarantee meant he got his £50, plus a fee, and I got my emergency £50. The consequences would come later.

This was before Wonga. If it had been around, maybe (OK, probably) I would have used them. The cost of bounced cheques - a huge earner for the “respectable” banks - can work out even higher than a short-term loan, even at 5,800%. It’s telling that Wonga’s biggest customers were always 20- to 35-year-old males. A former colleague, James Ball, wrote a searingly honest account of how he had used it. Yes, he said, they’re the perfect pin-up villain – but also that they “helped me, and doubtless helped plenty of other people”.

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from The Guardian https://ift.tt/2NCrvgC