By Marc Dooley

Let's say you're working a long, hard week where you'll earn a paycheck of $1,000. But when you get paid, you tell your boss he can keep $200 of it...so he can get himself a little something nice. And then you do the same thing next week. And the week after that.

Doesn't make sense, does it? But if you're getting payday advances, that's exactly what you're doing. Every time.

A payday advance is not a loan. When you get a payday advance, you write a check to a company, and they typically give you about 80% of that check amount in cash. Then they hold the check until the day you get paid by your employer, so you have the money in your account to cover the full amount of the check. The payday advance company then deposits your check and keeps the 20% as their fee for fronting you the cash advance. Which, by the way, is your money! And because it's not a loan, there aren't many benefits, as it does nothing to help you establish or improve your credit, so you don't even get that benefit for your 20%.

Because the amount of the advance is so small ($300 limit in California), you end up taking an advance over and over -- because it's not enough money to really get you out of the financial bind you're in. So they take that 20% every single time you get a payday advance, and that's the vicious cycle. According to a Wall Street analyst who studied payday advances, "The average customer makes 11 transactions a year."(1) That just goes to show that once you put yourself behind the 8-ball in the payday advance cycle, it's hard to catch up again.

You work hard every day for your paycheck, why would you give away 20% of it? So break the payday advance cycle. There are better options.

What are those options, you ask? Well, one good one is a personal loan. You can get more cash than with a payday advance -- now up to $10,000 in California, for example. Plus, when you take out a personal loan, the loan provider reports it to the major credit houses (Experian, Transunion and Equifax). So just by making the regular payments toward your loan, you can build up and improve your credit rating.

So where to go for a personal loan? You can talk to a loan officer at a bank, like Wells Fargo, Bank of America, Citi, Chase, etc. But if you haven't heard on the news the past couple of years, they've gotten pretty tight with their money. Most banks require people to have almost perfect credit scores to qualify for their personal loans. You can give them a shot, but hopefully you take rejection well.

Then there are specialty personal loan companies, like CashCall. Cashcall is a loan provider just like the big banks, except CashCall lends money to people with less-than-perfect credit. Their goal is to provide personal loans to people who need it, fast (as fast as a day), and their take is that everybody deserves a second chance. I'm proud of them for extending that kind of branch to people.

So the next time you're thinking about getting a payday advance, do yourself a favor and break that vicious cycle. Pick up the phone and make a cash call, and get a Personal Loan, instead. You could get more cash in your pocket, start rebuilding your credit -- and make some smart steps in truly getting back on your feet. You can call CashCall anytime, 24/7, at 866-590-CASH.

(1) M. Anderson, "Cash poor, choice rich, Paycheck-advance firms move in," Sacramento Business Journal (Jan. 11, 1999).

Marc Dooley is the Chief Marketing Officer for CashCall, Inc.

CashCall Personal Loans offers high-interest-bearing, unsecured term loans to qualified borrowers who typically use the loans for one-time purchases and debt consolidation. These loans of up to $10,000 are processed entirely over the Internet, phone and fax, and funds are wired into the borrower's checking account typically within 24 hours. CashCall Personal Loans are a good alternative to Payday Loans for borrowers. While interest rates are high, they are typically much lower than those of payday lenders, and CashCall Personal Loans have the potential to help customers rebuild their credit score by making payments on time.