Bank alternatives look for big payday in Middle America

PALM BEACH GARDENS, Fla. (MarketWatch) -- Payday lenders are spreading to Main Street and the suburbs.

"They are targeting the financially strapped middle class -- those with incomes who are asset poor and debt rich," warns Howard Karger, author of "Shortchanged: Life and Debt in the Fringe Economy" (Berrett-Koehler). "There is a trend to opening stores in suburban malls."

Some payday lenders, whose offices generally are open during nonworking hours when banks close, may sell franchises. Other high-cost services peddled under the same roof may include: Pawn, check cashing, rent-to-own, bill paying, money transfers, tax refund anticipation loans, car title loans, cell phone sales and money orders. Many are publicly traded companies. Services are advertised aggressively on the Internet and on television.

The danger: By paying too much for routine financial services, you can sink hopelessly into debt and perhaps face bankruptcy under what now tougher rules.

Payday lenders already are in middle-class to affluent areas, like Alamogordo, N.M.; North Palm Beach, Fla., and trendy sections of Houston. Advance America, Spartanburg, S.C., the nation's largest payday lender, is traded on the New York Stock Exchange....for more of the story from MarketWatch