Payday loans, paycheck advances, or whatever you choose to call them are a growing industry, doubling in size over the past six years to nearly $28 billion in loan volume. Family Credit Counseling Service receives many calls daily from people struggling to break the cycle of Payday lending. But are they really the best option for consumers in need of a little help until the next pay day? Let’s investigate.

While legislators try to put caps on interest rates and the maximum number of payday loans one person can have, most loan providers have found the loopholes - mostly through providing online loans. The average loan carries interest rates between 300-900% annualized. Only 1% of loans written are to consumers who can temporarily use the funds, pay the loan off and walk away; the rest fall into a deeper cycle of debt.

"OK, but what is a person to do that has bad credit and an emergency need," you say? Great question! Many reputable financial institutions are beginning to provide payday alternative loans with much more reasonable interest rates and officials are looking at stricter legislation for these loans as they tend to prey on the low and lower-middle class.

Bottom Line: If you find yourself in a financial crisis, look around for alternatives before being lured by the bright neon lights of the corner 24 hour payday advance store. Look for a reputable lender that might offer an alternative product or talk to a credit counselor to discuss what your options might be.