Modern payday lending came about in the late 1990s

Payday lenders spent more than $5M on lobbying efforts in 2025

Payday lenders largely oppose rate cap policies, increased borrower risk-assessment requirements, and other regulations that would effectively shutter their industry. In 2025, the payday lending industry lobbied against interest rate limits on payday loan apps.

Federal law requires payday lenders to meet certain transparency requirements, but states have their own regulations

Federal law treats payday lending like other lines of credit, meaning it requires lenders to disclose the loan's interest rate and its "finance charge," a dollar amount expressing the full cost of the loan. But states have their own regulations around payday lending, hence why it isn't allowed in every state and why the industry looks so different across the country. These regulations are often part of a state's usury laws.

'Usury' is the act of lending money at an excessively high interest rate

Laws regulating predatory lending are called usury laws and vary from state to state. Payday lending has historically been exempt from some states' usury laws, and some lenders have found loopholes in state laws or business structures that allow them to provide short-term loans with high interest rates.

Banks have increased small loan programs since 2018, upping competition for payday lenders

One of the reasons payday lending flourished for nearly two decades is that most banks charged high overdraft fees and didn't offer small loans. However, since 2018, banks have increased their small loan options. Supporters say this provides safer alternatives for consumers, as banks are subject to more regulatory measures and are less likely to allow consumers to keep rolling over loans.

North Carolina was the first state to ban payday lending

In 2001, the North Carolina state legislature let a 1997 law that permitted the small-dollar loans expire—effectively banning payday loans. In 2005, the NC bank commissioner ruled that Advance America, a payday lending company, had been operating in the state illegally.

In 2014, there were more payday loan stores than McDonalds

That year, there were more than 20,000 payday lenders in the US, according to the St. Louis Federal Reserve, and 14,267 McDonald's locations. Politicians and consumer advocates frequently cited this statistic as a selling point for increased regulation.

Payday loans typically have higher interest rates than cash advances

Cash advances and payday loans are both short-term loans that allow borrowers to access cash quickly. Payday loans are much shorter-term, often due in two weeks or by the borrower's next paycheck, and have much higher interest rates.

The first modern payday lending store opened in Tennessee

Check Into Cash Inc. is widely recognized as the first national payday lending company. Originally started by a preacher in Johnson City, it was later popularized by Allan Jones, who founded Check Into Cash in 1993. Jones has since donated a significant amount of money to the city. (Some users may experience a paywall.)

Payday lenders usually require borrowers to post-date a check or provide access to an electronic bank account

If borrowers can't pay back the loan, they can be subject to overdraft fees from their bank and other fees from the payday lender—further exacerbating the debt borrowers face.

Military bases were once targets for payday loans and other predatory lending

The Military Lending Act of 2006—a federal law—capped the interest a lender can charge an active-duty soldier at 36% after the Department of Defense criticized payday lenders for targeting young soldiers with high-interest, short-term loans. However, many towns near military bases still have predatory businesses that critics say take advantage of army families living paycheck to paycheck. (Some readers may experience a paywall.)

Tribal lenders have charged up to 600% APR on short-term loans

Some Native American tribes use their exemption from state legislation to bypass regulations on usury laws. Similar to payday lending, some tribal lenders have charged up to 600% APR on short-term loans.

Research shows that payday lending advertisements target minorities

A University of Houston Law Center study found that despite only making up 23% of payday loan recipients, Black people appear in 35% of advertisements. Similarly, 77% of the physical payday lending and auto title lending storefronts in the study targeted racial minorities.

Before the modern banking system, most lending resembled private credit

Before the creation of the modern banking system, the majority of loans were negotiated directly between the lender and the borrower—effectively making them private credit transactions.

Meet a payday lender who tried to fight the industry

Phil Locke once ran more than 40 payday lending stores in Michigan before walking away from lending in 2012. Locke left because he said he felt guilty about being a predatory lender. He tried to become a consumer protection advocate and influence reform, but ended up returning to the industry. (Some users may experience an email wall.)

Google banned ads for loans due within 60 days and interest rates exceeding 36% or higher

In 2016, Google said it would stop allowing payday lenders to advertise on the search engine. According to the company, this decision was made to protect users from deceptive and harmful financial products.

In 2025, the 'two strikes and you're out' rule took effect to protect consumers from repeated attempts to withdraw money

After years of being delayed by litigation, a 2024 US Supreme Court ruling upheld a law that prevents lenders from attempting to take payments from accounts with insufficient funds more than twice without reauthorization. This tactic is commonly used by payday loan companies, which technically require repayment on the day borrowers receive their paychecks.

What is buy now, pay later?

The buy now, pay later industry allows consumers to buy something immediately and pay in installments, typically without the need for applications or credit scores associated with credit cards. BNPL has boomed in the last decade, led by fintech companies Affirm, Klarna, and Afterpay, which have targeted young adults. Some critics say BNPL is a reinvented version of payday loans that allow borrowers easy access to cash with relatively few barriers.

Visualize the 5,000-year history of consumer credit in one infographic

Consumer loans for agriculture were likely first used around 3500 BCE, but modern consumer credit took many more centuries to be established. England's credit reporting system, for instance, dates back to the early 1800s when a group of English tailors began swapping information about customers who failed to settle their debts.

How student loans became incredibly prevalent

As of 2024, the total outstanding federal student loan debt sat at $1.6T, held by almost 43 million borrowers. Explore the history of student loans and how they became prevalent in the US, as told by several influential actors in the creation of the program over the years.

Cheap debt and relatively minimal regulation fueled private equity's expansion

Low interest rates in the 2010s made taking on debt cheap, making leveraged buyouts incredibly lucrative. Private equity firms were able to make large deals quickly, in part because they don't face the same disclosure requirements and shareholder approval processes as public companies. These two factors juiced the growth of private funds.

Roughly 43 million US borrowers owe roughly $1.7T in student debt, the second-largest source of consumer debt behind mortgages.

Minimum wage laws are a relatively new phenomenon in the US

Today, the federal minimum wage in the US is $7.25 per hour. But the country wasn’t founded with minimum wage laws in its DNA. The first federal minimum wage wasn’t set until 1938, when it was 25 cents per hour.

Gambling funded America's early expansion

In the colonial era, lotteries were viewed as a voluntary tax to help fund infrastructure and capital projects. The idea came from Europe, which had used lotteries dating back to the 16th century. The image below is from a Massachusetts lottery in 1758.

An estimated 91% of all Americans had used a coupon at least once as of 2022

Coupon use accelerated during the Great Depression, when the US unemployment rate reached nearly 25 percent. While coupons were invented in the late 1800s, they became more popular during the Depression as a way to stretch household budgets during the era’s economic hardships. Companies soon began distributing coupons via newspapers and women’s magazines.

30-year fixed mortgage rates have changed significantly over time

In the 1980s, 30-year fixed mortgage rates peaked just under 17%. During the COVID-19 pandemic, they were much lower, hovering around 3%.

Although payola was made illegal in 1960, it likely continued on the Billboard charts through the '70s

In his book “Uncharted Territory: What Numbers Tell Us about the Biggest Hit Songs and Ourselves,” music journalist Chris Dalla Riva argues that payola, the music industry term for undisclosed paid publicity, likely continued into the 1970s with the Billboard chart. Dalla Riva cites chart irregularities and reports about Bill Wardlow, Billboard’s then director of sales, who was a known booster for disco label Casablanca Records.

Hedge funds, the private investment firms that trade a wide swath of financial assets, make money by imposing steep fees on investors and from the fund's investment performance.

Long before Major League Baseball began allowing instant replay for balls and strikes, an umpire reluctantly used the technology to determine whether a hit was a home run, a move that inadvertently ushered in a new era for the sport.

At the beginning of the 20th century, a group of young men ate standard American food—replete with food additives like borax and formaldehyde—as part of government research to better understand food safety.

Telehealth demand for GLP-1s for weight loss is booming as consumers seek easier access.

In its famous catalog, Sears sold $600 DIY house kits from 1908 through the 1940s, resulting in an estimated 100,000 'Sears and Roebuck homes.'

The idea for the Federal Reserve was conceived in secret in 1910—with bankers donning duck hunt gear for disguise while traveling to a remote country club on Georgia's Jekyll Island

Domino's Pizza's 30-minute delivery guarantee was responsible for the chain's 1980s surge, but it was discontinued after the company was found liable for delivery driver accidents.

The first steps to rebuilding your credit score include getting to know exactly what's on your credit report and figuring out how far you are from the '700 club,' or 'good score' range.

For centuries, it was common to sleep in two shifts: a few hours at the beginning of the night, and a longer period beginning around midnight

Jimmy Carter signed a 1978 bill that legalized home brewing, a move credited with kick-starting the craft beer industry.

The word 'jazz' evolved from 'jasm,' 19th-century American slang for 'energy'

Despite being favored by 87% of Americans, Congress does not have term limits.

Use this tool to calculate the dollar value of your parental mental load, from meal planning to coordinating after-school care, then see resources that help generate solutions.

See this overview of the firework rules across all 50 states, ranging from a complete ban on non-professional fireworks in Massachusetts to states with more lax rules like Indiana.

A vending machine run with Anthropic's AI went out of business after it was convinced to give away items for free and sell a video game console.

Some researchers have labeled nomophobia, the fear of being without your phone, as 'the phobia of the 21st century.'

The story of Dollree Mapp, whose legal challenge over her 1957 conviction for possessing "obscene material" led to a major strengthening of the Fourth Amendment

20,000 letters to the advice columnist 'Dear Abby' provide insight into prevailing sex, religion, and LGBTQ fears, anxieties, and concerns from the 1950s onward.

Memecoins are a type of cryptocurrency—a form of digital currency with a wide variety of uses—created around popular 'memes,' or viral internet jokes.

'Saturday Night Fever,' the 1977 film that introduced disco to the mainstream, was based on a fabricated magazine story.

A pickleball's loud 'pop' sound can reach 120 decibels, which is equivalent to a hammer hitting a nail

The most expensive ad of all time was for Chanel No. 5 perfume and cost roughly $33M to produce in 2004—about $57M in today's dollars.

Planarian flatworms are small, aquatic worms with exceptional regenerative capabilities. When cut, the worms can regenerate multiple bodies in a matter of weeks.

For centuries, Niagara Falls has been a magnet for daredevils seeking to conquer one of nature's most powerful wonders, with its 200-foot drop and water rushing at 32 feet per second with 280 tons of force.