19 Million Americans Did This Last Year

NEW YORK (MainStreet) — Call payday loans the Vlad the Defiler of personal finance.

The strong warning from consumer protection advocates is that even sniffing one puts you on the fast track to financial ruin.

But tell us this: what do you do when that molar cracks, the pain is excruciating and your dentist long ago put you on a cash and carry basis? You have no accessible credit card balances. Your relatives hang up on you when you call. No savings.

Or maybe your car gets towed for unpaid parking tickets, and now you need $500 to bail it out - or you will lose your job, because your boss put you on warning last week about missed days.

What do you do?

What 19 million Americans did last year was take out a payday loan, said Jamie Fulmer, a senior vice president at Advance America, one of the nation's largest payday loan companies with operations in 29 states. He added that some 96% of Advance America customers rate their customer experience good to excellent.

Fueling this is that a lot of short-term credit availability has gone poof in the past decade. Traditional banks have cancelled credit cards, sometimes for scant reason. They have erased credit lines.

Also know that to a degree a generational shift is fueling the rise of payday lending, according to Jim Wells, president, Wellspring Consulting International in Fort Lauderdale, Fla.

"Millennials and Gen Y are gravitating towards using financial services on a pragmatic, transactional basis versus traditional, deposit-based banking," he said. "This pertains to the use of payday loans."

Wells added: "critics brand these non-traditional products 'predatory,' but in most states the rates and terms are regulated. All are published conspicuously on the walls of the outlets."