Payday Loans on Upswing as Six Flags Parks File Bankruptcy
Six Flags amusement parks file for bankruptcy
Many people rely on nontraditional loans like payday loans, installment loans, and cash advances to make ends meet. Although there are some signs that the economy has reached its low and should be on an upswing shortly, many businesses are still in distress. The latest large corporation to feel the strain of the recession is the Six Flags amusement park company. The company recently filed for Chapter 11 bankruptcy protection, seeking to reorganize debt of $1.8 billion.
Business to continue as usual
According to Six Flags CEO Mark Shapiro, the bankruptcy filing won’t affect the operations of the company’s 20 theme parks located throughout the US, Mexico, and Canada. Although the company had a record year in 2008, bringing in over 25 million customers, its debt has become unmanageable. The debt is estimated to be near $2.4 billion, and the company can no longer sustain it.
Discounted prices may still break the average budget
Because of the recession many people have cut amusement parks and other entertainment out of the budget. Six Flags, like other theme parks, reduced its prices to gain customers, a tactic normally used on in slow seasons like early spring and late fall. Specials like $10 entry fees, discounts on food and drinks, and two-for-one fares are all being used at the parks. Sharpiro added, “We are trying to maintain the revenues we do have as we face a restructure of debt. Six Flags will extend all discounting possible to better serve customers who are feeling the recession’s limitation of their funds.”
Many consumers see the Six Flag bankruptcy as another indication that the recession is not yet over. They believe more financial blows are to come. Economist Gary Lindall of Citigroup stats, “When you see industry giants having serious financial issues, it’s an indicator that individual problems could potentially still occur…people are taking notice of billion-dollar corporations’ actions and acting accordingly with their personal finances.”
Consumers are bracing themselves for more financial strain when it comes to dealing with everyday bills and expenses. Many qualifying customers are using payday loans, cash advances and installment loans as normal budgetary aids, rather than solely for emergency purposes. Analyst Dale Prichard of Smartmoney.com stated, “It used to be that nontraditional loans were looked at as an unusual choice and used for out-of-the-ordinary expenses. Research is showing that many Americans are looking to these types of funding every month as a way to cover their regular bills.”
New ways to balance the budget
The popularity of nontraditional loans is expected to grow exponentially in coming years as hard-hit consumers recover from the recession. Although there are some signs of an end to the current wave of economic problems, there are still a lot of financial issues to settle. For example, many homeowners are in the midst of mortgage modification programs and have yet to actually get used to their mortgage payments again. Because of changes in the credit industry, some people have to manage their finances without the credit cards they once relied on. Changes like these are making people wary of the future.
In the end . . .
As big corporations continue to struggle through the after effects of the recession, people are left to manage their finances with additional and nontraditional methods. Payday loans, installment loans, and cash advances are working their way into the regular consumer agenda, rather than being solely emergency options.