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April is Financial Literacy Month


April is Financial Literacy Month


We spoke about financial success with Common Wealth Charlotte (CWC), a nonprofit providing no-cost financial literacy services.

"In Charlotte, 200,000 people work full-time and take home around $1,600 each month – enough to cover basic housing, transportation, childcare and food costs. Unless. A car breaks down. A child gets sick. Or an injury causes missed days work. Then, the wolf is at the door. That is economic vulnerability, and it’s all too real for those who live in it." -CWC

For Financial Literacy Month, we partnered up with CWC to learn about predatory lending, something that can derail the best of us and our well-intentioned financial plans.


“I don’t know. 20%? 30%?”

That’s the answer Chuck Jones hears most when he asks people, “What is the highest APR (annual percentage rate) a predatory lender can charge?”. Chuck is executive director of Common Wealth Charlotte (CWC), the leading nonprofit provider of financial literacy services in Mecklenburg County.  

Unfortunately, when it comes to APR, perception and reality are very far apart. The truth is CWC sees predatory loans with effective APRs of 300% and above.

How can this be?

April is Financial Literacy Month, and Common Wealth Charlotte wants you to know more about predatory lenders and how to avoid them. 

Preying on Financial Instability

Let’s face it. We all experience unexpected expenses. It may be that we didn’t estimate correctly. It may be that the expenses came out of nowhere. Either way, we have to deal with them.

Expenses like these are always unwelcomed, but not uncommon: 

  • A water heater needs to be replaced – $1,500
  • A close relative in another state falls ill and you have to fly to be with them – $800
  • A reduction of hours at work results in not having enough to pay rent – $500.

If you have money set aside for emergencies, you pay what needs to be paid and your lifestyle is not greatly impacted. But, if you don’t have money set aside, it can be disastrous.

Or you may choose to use a credit card and pay the balance (with interest), over time. But it’s not that easy for a low-income wage earner, or someone with a very low credit score. For that person, options are limited.

CWC calls this economic vulnerability. 

“It’s a mouthful,” Jones adds. “But it describes it perfectly. Someone taking home $2,000 per month can make it until an event upsets cash flow. One unplanned expense can collapse your financial house of cards. 

A Decision Made Out of Desperation

If someone doesn’t have the resources available or friends or family to assist or cannot access charitable assistance, they experience desperation. That’s when predatory lenders too often step in.

A broken-down car you can’t pay to repair can result in loss of employment. Or rent you suddenly can’t pay can result in eviction.

Faced with losing a job or losing your home, many turn to predatory lenders. It seems like a solution, but it can easily make the problem worse. Pushing a problem further down the road can be like throwing gas on a fire. Predatory lenders charge ultra-high interest rates, and they usually demand access to auto-draw payments directly from checking accounts scheduled around pay dates. 

That’s how payday loans got their name – they’re the first thing taken away on pay day. Such loans are illegal in North Carolina, but they are readily available in neighboring states like South Caroline, Virginia and Tennessee, and even online. Auto Title loans that create a lien position on your car are also common, and legal in North Carolina. 

“Once you sign the paper and give access to your checking account, your money erodes quickly,” said Jones. “Before you know it, you’re in deep.”

A Real-Life Example

Jones shared that a CWC client needed $620. The reason? Her son, who had experienced some trouble in his teens, had enlisted in the Army. He passed basic training and was graduating at a base outside Chicago.

“She was so proud of her son and wanted to attend his graduation,” Jones tells. “She just did not have those funds saved and her credit score was too low to get a personal loan.”

So, she obtained an auto title loan. With an interest rate of 304%. Her $620 loan incurred finance charges of $1,402. That made her payback charges $2,023.

“It’s easy to say that she shouldn’t have done that,’” Jones continues. “But, what proud mother would miss her son’s celebration of achievement?”

Solutions Aren’t Easy

As long as predatory lending options exist, low-income wage earners will be targets. The solution to avoiding predatory lenders? Get in the habit of paying yourself first. 

Instead of a payday loan coming out of your paycheck first, dedicate yourself to putting something (even just $20 to $25 a month) in a savings account for a rainy day. And then, do not touch it unless it’s actually “raining.” Before you know it, you’ll have something to fall back on in times of emergency.

“A $500 emergency fund can solve most problems,” Jones adds. “We set that as a goal for most CWC clients.”

“Everyone should be aware that predatory lending is real . And, the victims are those who can least afford it,” says Jones. “But, Common Wealth Charlotte is here to help.”.  CWC offers education, support, encouragement and loans up to $750.  At 0% interest. With no fees. 

To learn more about financial literacy in Charlotte, and CWC’s free services available to low-income wage earners, visit or follow @cwclt. 

To go deeper on predatory lending, listen to this recent conversation between SHARE’s own Ohavia Phillips and CWC’s Chief Opportunity Officer, Amy Jacobs. 

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