Payday loan use is concentrated in the bottom half of the income distribution

Evidence

5 The SCF does have information on payday loans but only for 2007. In 2007, 4% of households in the 0–20% and 20–40% reported using payday loans, 3% in the 40–60%, 1% in 60–80% and 0% in the three upper groups. This level of participation is close to what Barr (2012) observes (3.4% for the bottom 20% of the income distribution). — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 94

Categorization

• SHARE: A concrete data point for anyone tracking fringe banking/predatory lending — that payday participation disappears entirely among the top 40% of households.