Colorado's credit counselors overwhelmingly advise clients to avoid payday loans when in need of access to quick cash.

With an eye on persuading state lawmakers to limit the lending practice, the Bell Policy Center released data showing that 73 percent of the counselors surveyed would never recommend the short-term loans.

"These are harmful products," said Bell policy director Rich Jones, speaking at a news conference Wednesday at the state Capitol. "They're easy to get into but excruciating to get out of."

Payday loans - short-term loans with high interest rates or fees - reached $639 million in Colorado in 2007, according to the attorney general's office. The number of licensed payday lenders declined 7 percent to 618.

The average payday loan amount was $362 in 2007 with an annual interest rate of 318 percent. A third of all borrowers had seven or more payday loans from the same lender, and 11 percent were in debt for at least six months of the year.

"They are borrowing against the future," Catholic Charities' counselor Kitty Smith said in a statement. "If they don't have the money this month, they aren't going to have it the following month."

Smith has begun advising new clients that "they aren't allowed" to take out payday loans.

But payday lenders maintain they provide a service to customers who would wind up paying more if they bounce checks, pay returned check fees or pay late fees on credit card bills.

Ron Rockvam, president of Money Now loan stores in Colorado, said customers pay $15 for every $100 they borrow for loans of up to $500 that typically cover small "unexpected" expenses.

"For somebody to be even proposing to eliminate another credit choice for Colorado consumers at this time is beyond me," Rockvam said.

He called it a "misconception" that his industry preys on the poor, saying that customers must have a checking account and a steady source of income.

But Jones said research shows that many loan applicants are single women making about $28,000 a year. Jones said borrowers often find they can't repay a loan once they get paid, which means they must refinance them by paying more fees.

Credit counselors responding to the center's survey recommended that cash-strapped clients try to negotiate new terms on credit cards, mortgages and other debts or borrow from family or friends before resorting to payday loans.

Legislation failed last year that would have imposed statewide curbs on the amount of interest payday lenders could charge.

kelleyj@RockyMountainNews.com or 303-954-5068