Articles have been coming out describing payday loans as potentially being your saving grace. This is false advice that should not be heeded. Payday loans are generally a bad idea, and I'm going to show you some numbers that might better assist you in deciding for yourself.

These companies will rarely deal with the familiar interest rate terms that you are so accustomed to. They like to charge flat fees which are far worse! Would you use a credit card that charged 40% interest, and the interest was mandatory to pay with no grace period? Payday loans tend to be worse than the above mentioned credit card, especially if you are considering a "no faxing" payday loan!

Pay day loan companies, also known as cash advance companies, prey upon people who are in desperate positions and know little about money. They will often provide you a fixed sum of money for a fixed fee. This sounds harmless, but that would be false!

Let us say that you are in need of $100.00 to pay a looming electric bill that you are going to miss. You have two options:

1. I will give you $100.00 that you must pay back within 30 days at 95% interest.
2. The Cash advance store will loan you $100.00, and you have to pay them $110.00 in 30 days.

Which option do you choose? If you dig deep enough, then you would realize that option number 1 is the better deal. How can that be? The actual APR (Annual Percentage Rate) you are paying on option 2 is about 124% interest! This is what we mean by them preying upon people. With my deal, which was 95% interest, you would have paid $2.00 less. You were still ripped off, but not as badly.

I agree that this practice is terrible, but these companies only exist because people use them. It is up to you and everyone around us to not use these companies and stop the proliferation of this type of business. If people were not living outside of their means and educated about money then this would not occur. It is up to you to become educated in this subject and let others know how badly they are being ripped off.

Unfortunately, these companies are well within their legal means, so there is little recourse when you use their services. But in all fairness, you should not be seeking legal recourse as it is your decision whether to use the service or not.

Firstly, as an adult, it is your responsibility to not get yourself into such a position.  You should be saving extra money, and cutting expenses wherever possible.  I've heard many excuses, but everyday I find new ways to save money so I know that excuses are just that - meaningless words.  I've had many people challenge me to save them money and I've often been able to save them at least $100.00 a month, going as far as pointing out coupons that will save them 50 cents on one grocery item.  Before you think in dollars, you must first think in cents.

If this is your absolute last resort then you may need to take this option, but after the bill is paid you need to cut the bill off. You need to figure out how to save more money, because it is a dangerous cycle when you start using payday and cash advance loans. Next month not only will you owe on this bill again, but you will also owe on that cash advance, and the cycle builds and builds until they are taking everything you own to pay off the debt you have piled up.

You can read my article on eliminating credit card debtto start your recovery. You can also try and cut your bills down as much as possible. Eliminate cable TV, satellite radio, stop eating out, cut your phone bill down, and use grocery coupons. There are a number of ways a person can save money, but do whatever you must to avoid payday loans and cash advances.