Americans Facing HUGE Fees for Basic Loans In Biden’s America

Americans face a hidden financial crisis as millions struggle with short-term loans and burdensome fees, revealing widespread instability even among middle-income earners.

At a Glance

  • Cash-poor Americans paid over $39 billion in junk fees for borrowing money last year
  • Many earning over $75,000 annually still experience financial instability
  • Unplanned expenses cost families nearly $2,000 annually
  • Subprime credit cards incur $11.5 billion in fees annually
  • Nearly half of paycheck-to-paycheck Americans have less than $200 in their accounts

The Widespread Nature of Financial Instability

The financial landscape for many Americans is marked by a troubling reliance on short-term loans that come with hefty fees. This issue is not confined to lower-income brackets but affects a broad swath of society – thanks to Joe Biden’s economic policies.

According to recent reports, cash-poor individuals—those living paycheck-to-paycheck—paid over $39 billion in junk fees for borrowing money last year alone.

An alarming trend has emerged: many individuals earning more than $75,000 annually are still financially unstable. These middle-income Americans often find themselves compelled to pay high costs for cash advances or turn to family and friends for assistance when overwhelmed by unexpected expenses.

The Impact of Junk Fees on American Households

The 2023 Cash Poor Report reveals that unplanned expenses, such as hospital visits and car repairs, cost families nearly $2,000 annually, with auto repairs being the most common. To cover these costs, 40% of borrowers turn to credit cards, while others borrow from family, sell possessions, or, in desperate situations, resort to illegal activities.

Subprime credit cards are major contributors to the fee burden, incurring $11.5 billion in fees annually. These fees include various charges like late fees and ATM fees, which disproportionately affect those already struggling financially. Payday loans and fintech solutions also contribute significantly to the annual fee burden, exacerbating the financial difficulties faced by many.

The Scope of the Problem

The issue of being “cash-poor” is more widespread than many realize. Up to 58% of Americans are living paycheck-to-paycheck, with nearly half having less than $200 in their checking and savings accounts combined. Surprisingly, this financial instability is not limited to low-income earners. One in seven cash-poor individuals earn more than $75,000 annually, and a third earn over $50,000.

The high cost of living continues to pressure middle-class Americans, with predatory lending practices further complicating their financial situations. Two-thirds of cash-poor individuals reported that their financial situation worsened in the past year, highlighting the urgent need for fair and transparent financial services.

To combat these issues, there are calls for increased consumer awareness and regulatory action. One proposed solution is replacing the Annual Percentage Rate (APR) with a Total Cost Rate (TCR) for clearer understanding of borrowing costs. This change could provide much-needed transparency in the lending process, allowing consumers to make more informed decisions about their financial options.

Biden has talked a lot about how he’s going to tackle this, but now he’s leaving office – and with him go the policies that caused this mess.