ABSTRACT
Kevin Woodall2 was on his honeymoon when he learned that his employer had filed for bankruptcy. Strapped for cash and saddled with a poor credit history, Kevin wrote a check for $500 – more than he had in the bank at that time. He received back $350; the extra $150 represented a fee of $30 for each $100 he borrowed. At the end of two weeks, he didn’t have enough to repay the loan, but he did have enough to cover the $150 fee, so he paid to renew the loan for an additional two weeks. After a year, he had paid approximately $4000 in fees and still owed the principal of $350.
