Summary
Many Americans are expected to overspend during the holiday season, with some turning to payday loans, which are expensive short-term loans. Payday lenders now use artificial intelligence (AI) to quickly approve loans and target customers, which might increase financial issues for those borrowing money.
Key Facts
- Holiday spending in the U.S. is projected to exceed $1 trillion.
- About 66% of Americans plan to borrow money for holiday shopping.
- Payday loans have an Annual Percentage Rate (APR) between 300% and 400%.
- Around 12 million Americans use payday loans each year.
- AI helps payday lenders approve loans faster and target specific customers.
- Common payday loan borrowers earn less than $40,000 per year.
- African Americans and Latinos are overrepresented among payday loan users.
- Many borrowers struggle to repay these loans, leading to cycles of debt and defaults.
