economy (money)*(Via Daytona Times) – Most payday borrowers use the small-dollar loans to cover ordinary living expenses instead of occasional or unexpected emergencies, according to a new research report by Pew Charitable Trusts.

“Who Borrows, Where They Borrow and Why,” the first in a series of payday lending reports by Pew, also found that 81 percent of those who have used a storefront payday loan would cut back on expenses if the high-cost loans were not available.

Payday alternatives preferred by consumers included credit unions (44 percent), credit cards (37 percent) or an employer loan (17 percent).  Among first-time borrowers, 69 percent used a payday loan for recurring expenses such as utilities, credit cards, housing or food.

Although most payday borrowers are White, female and aged 25-44, African-Americans and four other groups are the most frequent payday borrowers: renters, consumers earning less than $40,000 annually and those who are either separated or divorced.

Additional Pew findings showed:

• Twelve million Americans used a storefront or online payday loan in 2010, the most recent year for which substantial data is available;

• The average borrower is indebted about five months of the year; and
• On average, a borrower takes out eight loans and spends $520 on interest.

Read/learn more at Daytona Times.