Recession watch: My first payday loan

This post is part of a series about real-life signs we're in a recession.

For years, I've lived by a couple rules. For instance, I never eat yellow snow, and I never step foot inside one of those payday lending establishments.

Well, at least my yellow snow rule is still intact.

Like many Americans, I've never had a high opinion of payday lending loan establishments, but earlier this year, utterly broke, I finally broke down. My reasoning was that I'd rather take out a few hundred dollars from a payday loan place than ask my parents for money, something that really loses its appeal after the age of, say, 25, let alone when you're 38. And the last thing I wanted to do was to try to play a cat-and-mouse game with my bank called, "Write a check to the store and hope it's not cashed for awhile."

So I confess. Earlier this year, for the first time in my life, I went to a payday loan place. But I only did it once. Well, twice.

OK, four times.I don't know if this a sign that I'm part of this unofficial recession or not. After all, as a freelance writer, not getting paid is nothing new. Even during the best of times, some publications seem to make paying the writer for their work their last priority. What I do know is that as lousy as the payday lending industry's reputation is and as distasteful as their interest rates are, I was glad to have the option of going to a payday lending store when I needed one (if you need to do it, here's how).

That, however, may not be the case much longer. Payday lending establishments are being put under the microscope by a lot of state governments lately, and there's a lot of talk of trying to regulate them out of existence.

Once upon a time, I would have said, "Good riddance, get rid of them, all of them." I have a relative who has a history of going to these payday loan places, and he put me down as a reference without warning me first, and so when he was late (repeatedly), guess who was called? There's no question in my mind that payday loan stores can be to debt-riddled people what the tar pits were to dinosaurs.

And yet -- I'm finding myself rethinking all of this and wondering if perhaps the credit card industry and banking industry should be examined more thoroughly first, since those are generally the first places where Americans tend to get into financial trouble. After all, a lot of people use payday loan stores, and it's likely happening now more than ever. Nationwide, in fact, Americans pay about $5 billion a year to borrow more than $40 billion from payday lenders. So if payday lenders are run out of town, what will happen to people who feel like these places are their last options?

Geoff Williams is a business journalist and the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale).
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