Plans for a cap on the cost of payday loans have been welcomed by Exeter Citizens Advice Bureau.
But the charity has called for banks to do more to provide alternatives to the high-interest loans and urged borrowers to review their finances if they regularly rely on payday lenders to make ends meet.
Announcing the Goverment's intention to introduce a cap on the cost of payday loans, Chancellor George Osborne said: "This is all about having a banking system that works for hardworking people and making sure some of the absolutely outrageous fees and unacceptable practices are dealt with."
Exeter CAB chief executive Steve Barriball said 15 to 20 clients a month are contacting the charity for help with debts involving payday loans.
"The numbers may not be massive but the impact on those people we are seeing is considerable," he added. "We have seen APR interest rates of up to 10,000 per cent.
"If you have to take out a payday loan that's probably an indication of a wider problem with your finances, and if you are thinking about a second loan you really need to think about preparing a budget and cutting back on certain areas."
Earlier this year the CAB teamed up with Exeter Chamber of Commerce to encourage employers to offer salary advances to help staff avoid expensive payday loans.
Welcoming the planned cap on interest rates and fees charged by payday lenders, Mr Barriball added: "This is a cap on the exploitation of people struggling with the rising cost of living. Payday lenders have failed to stick to their own promises to treat customers fairly. The Government's plan to cap the cost of loans only goes to show how out of control the industry is.
"The extortionate interest rates, hidden charges and lack of financial checks have pushed many payday loan customers into serious financial hardship. As our figures show, three in four people who take out payday loans get into difficulties."
He added: "Banks are still shunning their responsibilities to offer their customers alternatives to payday loans. The Government needs to put pressure on traditional lenders to introduce responsible short-term micro-loans."
