By Joe Gilmore

I learned at a very young age how important credit is. My parents opened up a bank account for me when I was still in elementary school or junior high. I got my first credit card in high school. Since then, I have been using it to build up my credit score so that when I need to take a loan the interest rate will be acceptable. I have a lot of friends whose credit scores are in the tubes because of their lack of education and oversight and their abundance of credit cards. I was lucky enough to have parents that taught me the importance of financial security and independence when I was so young, and I know that most people don’t have that luxury.

One thing I’ve seen related to this is how much of an impact predatory loans, specifically payday loans, can have on a person.

One of my family members got caught up in some trouble because of her inability to pay off these loans due to the enormous interest rate on the loan. Her loan had an interest rate of over 200 percent, however, some payday loans can have interest rates that are even higher than that, much higher, up to 1200 percent.

These loans are a downward spiral because of the high interest rates. If that wasn’t enough already, the interest on these loans are compounded which makes it even harder to pay off. The high interest rates alone make the loan hard to stay ahead of, but when you make the interest compounded it is virtually impossible to dig yourself out of the hole, or grave, that you have dug for yourself. In my family member’s situation, she had to have other friends and family step in to help her pay off the initial loan and interest payments. But without them it is hard to say where she would be right now, she easily would have lost her home along with any other valuable possessions.

I saw how these types of loans can affect the person who took the loan as well as other family and friends who had to step in to help and I know that I must be weary of these types of predatory loans.

The fact that these types of loans are legal is another issue altogether but I know that this situation gave me more insight into money and finances.

A lesson that the payday loan incident, along with other situations I’ve been in, have taught me is that money can have a profoundly negative effect on people. I know that is something that people talk about a lot, how money can come between and divide people, but, in my opinion, a lot of people don’t actually care. Everybody wants to make money and live a lavish lifestyle but some people will put their moral values to the test to achieve that.

My parents have always taught me that there is more to life than what’s is your pocket, and I am a journalism student so maybe I listened.