Both in my PC (mortgage lender client) and on the streets, I today enter the terrifying world of… the sub-prime lending market.
There’s a lot of poverty in my patch of southeast London, and the denizens of doorstep lending, pawnbroking, and expensive mortgages find rich pickings in this ‘hood. I have nothing against such operators – they fulfill a vital function, servicing people who can’t get credit elsewhere. (Having the option of high-interest credit is better than having no options at all.) And this is the free market at work, after all.
But it reminds me, as I pass the MSB on the way to the Tube – with a sign outside that uses an APR of 107% as a selling point (!) – that there are a lot of people out there paying vast sums for credit, who are far less able to afford it than me.
Because while some of the reasons for poor credit ratings may be people’s own fault – careless spending, laziness, prioritising a plasma TV over school uniforms – many of the reasons aren’t: having poor parents or working a low-paid job is no shame or crime. (I do, though, take offence at the lenders who target people drawing unemployment benefit; that money is so they can buy food, not pay interest.) The Visa card offers I get that charge £70 a year plus an APR of 56.6% aren’t aimed at me, but are aimed at people in the same postal district, people I pass on these streets every day.
And it confirms the validity of my only two fears in life. Do anything you can to avoid being poor or getting old.