High interest rates

From the UK:

A consumer borrowing £100 on the card would be charged £35 in interest
on repayments of £5 a week over 27 weeks, giving an APR of 222.7%.

Is this for people who already have borrowed from the loan shark and must repay immediately or else?  Or do the borrowers simply not understand annualized interest repayments?  Of course micro-credit also involves high interest rates (in the 50-100 percent range, usually) but I can see two immediate differences.  First, micro-credit is often used to take the kid to the doctor when otherwise the outcome would be grim.  Second, micro-credit is usually marketed to the higher-IQ element in the village, not the lower-IQ element.

Addendum: Here is Virginia Postrel, defending consumer credit.


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