Let's compare a $500 cash advance loan with a "regular" one and see which one looks better in the long run:

*A regular loan company charges 24 to 48% annual interest and permits installment payments over several months. Borrowing $500 at 36% annual interest and repaying in monthly installments for four months, you will have paid $38.04.

*Renew a $500 payday loan every two weeks for the same four months, and you will have paid $700 in fees (if the fee is $17.50 per $100.)

Note: A $500 cash advance repaid in four months costs $48.86 if the card has an average 20.23% APR interest rate, even if there is no grace period. The most expensive credit card cash advance costs $66.77 for the same $500 advance repaid in four months.

An even better bet: a $200 credit union loan repaid in three months costs $6.05 (a cash loan or a cash advance on a credit card from a federal credit union cannot exceed 18% annual interest).

OVERDRAFT PROTECTION: MORE THAN JUST GUARDING AGAINST BOUNCED CHECKS

Overdraft protection from your bank or credit union transfers money from your savings or other cash source to cover checks that overdraw your account. While overdraft protection does cost you a fee, it's still less expensive than borrowing from a payday lender. Tip: avoid "courtesy overdraft" programs that charge fees for bounced checks.

DON'T FALL INTO THE VICIOUS PAYDAY LOAN CIRCLE

Payday loans are simple to apply for -- you can do pretty much everything right online -- making it tempting to take out a second loan to cover the original. Don't fall into this trap, as you'll pay a lot more in the long run.

If you do get into trouble repaying a payday advance, contact your lender and say you need to work out an installment payday arrangement. Many states require lenders to provide extended payment plans (Alabama, Alaska, Florida, Illinois, Michigan, Nevada, Oklahoma and Washington). Contact your state regulator if your lender refuses to work with you.

Some lenders will take money directly from your paycheck if you fail to meet repayment terms. (Read your contract to see if you signed a voluntary wage assignment clause.) Mandatory wage assignments as used in some payday loan contracts are prohibited by the Federal Trade Commission's Credit Practices Rule.

Know Your Rights: Report Lenders Who Don't Disclose Costs Up Front

Lenders are required to quote the cost of loans as both the dollar finance charge and the annual percentage rate. Report violations of the Truth in Lending Act to the Federal Trade Commission's Consumer Response Center. Toll-free 1-877-382-4357; TDD: 202-326-2502; by mail: Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, DC 20580; or by e-mail using the online complaint form at www.ftc.gov. The FTC does not resolve individual problems for consumers, but it can act against a company if it sees a pattern of possible law violations.

How to File a Complaint

First, find the agency in your state that regulates lenders. (If you live in a state that doesn't allows payday lending, your state regulator can help you take action against unlicensed loaners.) The agency can help you work out a payment or settlement arrangement with the lender.

Next, seek legal help. You can consult the Legal Services Corporation Program Directory for your state, or, if you're in the military, the legal office on your base.