Paper: Mainstream Lenders Prey Upon the Weak

By James Temple, Contra Costa Times

Payday lenders and pawn shops are often criticized for targeting the working poor, but mainstream businesses also push products and services tailored to the impoverished.

For at least the past decade, the credit card industry has been boosting late fees, slicing grace periods, canceling low introductory rates for a single infraction and increasing interest rates in general, notes a study by Demos, a New York-based research and advocacy group. All of these trends disproportionately affect those with spotty credit histories, irregular cash flow and limited income.

Meanwhile, credit card use among the very poor, those with income below $10,000, has skyrocketed, with average household debt jumping 184 percent to $1,837 from 1989 to 2001 (all in 2001 dollars), the study found.

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