Journal of Family and Economic Issues

, Volume 39, Issue 2, pp 360–369 | Cite as

The Increase in Payday Loans and Damaged Credit after the Great Recession

  • Jonghee Lee
  • Kyoung Tae KimEmail author
Original Paper


The proportion of US households that used a high-cost credit product, payday loans, almost doubled between 2007 and 2013. In this study, we estimated the effect of credit constraints on the likelihood of using payday loans. Based on a logistic regression of data from the 2007–2013 Survey of Consumer Finances (SCF), we found that households with credit constraints were more likely to use payday loans than were those that did not experience such constraints, and that the effect was greater after the Great Recession. Over the survey years, having an emergency expense was the most important reason given for using a payday loan, but the rate at which other reasons were given varied over time. Paying bills/loans and having no other credit options were both reasons given more frequently following the Great Recession than in 2007.


Payday loans Credit constraints Great recession Survey of consumer finances 

JEL Classification

D12 D14 


Compliance with Ethical Standards

Conflict of interest

The authors declare that they have no conflict of interest.

Research Involving with Human and Animal Participants

This article does not contain any studies with human participants or animals performed by any of the authors.


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Copyright information

© Springer Science+Business Media, LLC 2017

Authors and Affiliations

  1. 1.Department of Consumer Information StudiesKeimyung UniversityDaeguSouth Korea
  2. 2.Department of Consumer SciencesThe University of AlabamaTuscaloosaUSA

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