That article didn't even mention how a great many of the poor finance things like TV's.
What do you do if your TV dies and now you have nothing?
If you are part of the middle class, you grab your credit card and get in your car and take a drive to an electronics store or the mall. You shop around till you find something suitable, in both price and quality, and when you find something you are happy with, you then put it on your credit card.
But if you are poor and have no car or credit card, you go to the local RAC or ColorTyme, subject yourself to their high pressure sales tactics, and select a TV from their very limited selection. Then you sign a contract to make weekly payments for a set term (usually about a year & a half). At the end of that term you own the TV.
But is it a new or used TV? Is it a refurb? You really don't know when you sign the contract. How about the interest rates? They don't disclose that either and will even claim they technically don't charge interest, so they don't have to disclose that.
By the time you have paid off your possibly used, possibly refurbished TV, that you could have bought at Sears for $250 if you had a car or a credit card, you'll be paying over $1000. And shortly after you finally pay it off, it will probably die on you, starting the whole chain all over again.
Oh, and if you are late or miss a payment, they come take the TV away, and if you come up with the money for the payment and want the TV back, you have to start all over again with a new contract, essentially losing everything you paid towards the TV already.
And unlike a credit card, there is no reward or benefit in paying it off early. There is no reduction in fees or interest.
Additionally, during the term of your contract, you will be contacted quite frequently by company sales representatives that will try to pressure you into buying more overpriced crap from them. They are not happy with you just wanting a TV. They want to replace all your furnature, appliances, and electronics.
If you have kids, they will pressure you into buying a $500 computer for them, at a final price of over $2000, with a sales pitch that will lead you to believe that if you don't do it, that it means you are a bad parent that doesn't love their kids and want to see them succeed in life.
You'll find that these businesses operate essentially only in poor neighborhoods. You will not find them in the middle class suburbs. If you are part of the middle class and one of these places opens up shop in your neighborhood, it's time to move. It's one of the signs that your neighborhood is going to hell.http://www.clnj.org/rentown.htm