Low Consumer Confidence Breeds Possible Need for Payday Loans, Financial Fixes
By J.J. CameronPayday Loan Writer
As reports come in that individuals in Great Britain are suffering from mounting debt, the prospects at home aren't much higher at the moment. More and more Americans are considering the use of payday loans because they have little confidence in their financial future otherwise.
In fact, surveys shows that consumer confidence slid to a three-month low in August, as people worried about the direction of the economy and their own balance sheets in the months ahead. It's, therefore, little wonder the popularity of faxless payday loans increased.
The RBC CASH Index, based on results from the international polling firm Ipsos, showed confidence ebbed to 74.8 in early August. That marked a sharp drop from July's showing of 80.1. It was the second month in a row that confidence dropped, andthe lowest reading since May.
Economists blamed the deterioration in confidence mostly on rising energy prices and a cooling in the once-hot housing market.
With housing prices not going up as much as they had been, people aren't feeling as wealthy. They can't simply rely on home equity to get them through difficult times - and the result is curiosity about quick cash resources, such as an instant payday loan.
"Right now consumers are feeling insecure. They are worried about their inability to finance their standard of living in the face of higher gas prices, a softening economy, a slowing job market and a cooling housing market," said Peter Morici, an economist and professor at the University of Maryland's Robert H. Smith School of Business.
The economy - and the job market - have shifted into a lower gear. Economic growth slowed to a 2.5 percent rate in the April-to-June quarter as consumers and businesses turned cautious.
The nation's unemployment rate in July rose to 4.8 percent, a five-month high. As a result of all these factors, consumers are growing more anxious about future economic conditions. An index measuring their expectations about the next six months - including the overall economy's prospects as well as their own financial situations - declined in early August to 21.8, down from 34.2 in July.
What does it all mean? There's no reason to panic, but an increased number of people will probably look into the possibility of a cash advance or faxless payday loan in order to dig themselves out of debt holes.
