The economic downturn and growing fees of the banks has given a major boost to the payday loan industry. Times are bad, most people are out of work, have little or no cash and still want to live a life full of luxuries. Therefore most of these people are looking for short-term cash loan to meet their goals.

These people have such a bad credit that they are often rejected by the banks. As they don’t get any opportunity to get cash from any other place, they take a payday loan.

You will be surprised to know that almost one out of every three people in South Carolina and one in every four in North Carolina don’t have a bank account. For them the primary source of income is payday loans.

Almost 31 percent of US households have closed their bank accounts because they were unable to pay the fees associated with the account maintenance or were unable to maintain the minimum balance. FYI – if someone is unable to keep a minimum balance in their accounts, the banks are liable to charge a fee from that customer.

Recent data also shows more than 46.2 million people in the US are in poverty – an increase of 12.3 percent since the last decade. Where do these people go if they need short term cash? Of course they look to payday loans.

The scenario hasn’t changed much since the recession struck US in 2008. All attempts of the government to boost the economy is failing. Moreover government itself is living in borrowed money and we can’t except the US government to distribute free cash.

People know this and therefore resort to payday loans to meet their daily expenses. Though truly speaking cash obtained from payday loans should be used for emergency situations only, but there is so much of shortfall of cash that we can’t blame the people.

Unfortunately the governments of many states are looking to close this business. If payday loans are closed where will these people go for short term cash?