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Payday lenders are often blamed for taking advantage of the little guy. But that's something that Justin Davis, a payday lender in Kansas City, Missouri, takes issue with.

"For me and my business, I try to treat my customers right," says Davis. "As long as people do the math, then they are not doing something stupid."

A recent study from Pew reports that the average payday loan borrower ends up indebted for five months*, paying $520 in finance charges for loans averaging $375.

But Davis, who charges a 17 percent interest rate for a two-week loan, argues that his business can still be a good alternative for those who are trying to avoid even higher overdraft fees on late bills.

"My service is not only competitve with those fees, but in many instances, cheaper," Davis says. "Most banks will charge you a $4-a-day continuous overdraft fee."


 

*CORRECTION: An earlier version of this story incorrectly referred to the length of time a payday loan borrower remains in debt, according to a Pew study. According to the study, the average borrower is in debt for five months. The text has been corrected.

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Follow Jeremy Hobson at @jeremyhobson