Avoiding payday loans in the first place is your best bet to keep from getting yourself in a deep debt hole that's very, very hard to climb out of. It's been reported that 5 million Americans have been caught in the trap of payday lending, according to Responsiblelending.org.

Run by The Center for Responsible Lending, this website charges that payday lenders actually strive to trap their customers by making loans their customers have no way of paying off. Thus, customers are caught in a vicious cycle of repeatly paying fees on the same small loan over and over again.

According to their website, a postdated personal check or an authorization for automatic withdrawal from the borrower’s bank account is given by the borrower. In return, they get a $300 payday loan.

However, the lender only gives a borrower $255 in cash, and the balance of $45 is the fee for the loan. Any way you look at it, that's a huge interest rate.

But if often gets worse. When the payday loan comes due, the lender often has to pay more fees or renew the loan just to keep from going into default.

To avoid default, borrowers might be forced to pay another $45 to keep the same loan outstanding, or they agree to pay the full $300 back, but then immediately take out another payday loan, with another $45 fee.

Bottomline: some borrowers pay $45 every two weeks to float a $255 advance loan – while never paying down the original amount of the principal.

Payday lenders argue that they are making high risk loans and serve a market that is ignored by traditional banks and lending institutions. Many people they serve have bad credit which prevents them from getting a small, short-term loan to tide them over until their finances improve.

But payday lenders are coming under increasing criticism and regulation across the country.

This article and related warnings from this organization is found at: Payday/DebtTrap on their website. They've also published timely warnings titled "Nine Signs of a Predatory Payday Loan." Their article can be found at: the Responsiblelending.org website.

We empathize with people who are in dire straits and who are forced to turn to payday lenders to help them pay bills. Our hope is that people who fall into this trap can take advantage of the free information we've posted here to get debt relief, get out of debt, fix their credit report and start the steps toward improving their credit history.

If you feel that you or someone you know has been taken advantage by a payday lender, you can ask for assistance here.

In January 2008, the Community Financial Services Association (CFSA) rolled out a new consumer website called www.knowyourfee.org, in an effort to help borrowers know the fees they will be charged taking out payday cash advance loans, and also, to help stem the PR nightmare that payday lenders have struggled to deal with.

Their fight is justified, because there really are times when payday cash advance loans can help a person out in tough financial times. Should they be used in all circumstances? Absolutely not. But sometimes, cash advance loans might be the only options available.

Some of the benefits of payday cash advance loans are detailed in the article below:

"No Credit Check Payday Cash Advance Loan - Benefits to Using a Payday Loan Online if You Have Bad Credit History"

By Carrie Reeder

An online payday loan can help you rebuild your credit if you have a bad credit history. With no credit checks, you can be approved for a cash advance to keep on track with your bill payments or survive a financial emergency without ruining your credit score. If used as part of a larger financial plan, a payday loan can help you achieve your long range financial goals by helping you survive short-term financial challenges.

Emergency Cash

A cash advance should only be used for a financial emergency. If you need cash but don’t have the funds, then consider applying for a payday loan. These short-term loans do not require any credit checks. So even if you have poor credit, you can get money. By using online lenders, you can check their rates and terms to find the best lender.

Avoid Lower Credit Scores

A payday loan can help you pay bills that you might otherwise be late on. Every time you miss a payment, you are just knocking your score lower. Lower scores result in higher interest rates, which result in higher payments. So by taking a short-term loan to cover bills now, you could be saving yourself money down the road.

Payday loans can also help you avoid late fees and non-sufficient fund fees from banks. Usually these fees will be higher than charges for a payday loan. And you can keep your credit record clean.

Discreet Application

Online applications allow for a discreet transaction. No one but you and the lending company know you are asking for a loan. Your information is processed online for confidentiality and speed.

Part Of A Larger Plan

Payday loans are not the answer to all your financial problem, but they can be a valuable tool in rebuilding your credit. As one of the few lines of credit that do not require a credit check, you can take advantage of it no matter what your score is. However, don’t get in the trap of relying on these types of loans. Pay them off on payday and use them only for emergencies.

Online lenders automatically withdraw your loan payment after your payday. Make sure whenever possible you pay off the entire amount, not just the financial charges.