Sebastian McCamey lives in Chicago. He's in his early 20s. Not long ago he got a ticket for smoking outside a transit station.

It's open. It's outside. So I was just standing outside waiting on the bus stop and I lit me a cigarette and the officers pulled up on me.

I was like, hey, you know you can't smoke it. I was like, no, I didn't know I don't see no signs. So they wrote me a ticket.

The ticket wasn't cheap. At the time McCamey was making $8.45 an hour working at a supermarket.

$150 ticket was a big problem. He also had an outstanding $45 phone bill. So he ignored the smoking ticket, hoping it go away.

That didn't work out so well. He got some letters from the city demanding he paid the fine.

So he went to a payday loan store and borrowed some money.

I got like $200 and it was just like, I needed some real quick cash. There wasn't no hesitations, no nothing.

They asked me for certain pieces of information. I provided the information and I got my loan.

McCamey paid off the ticket and the phone bill. So out of the payday loan I had like $4.50 left.

They're called payday loans because payday is typically when borrowers can pay them back.

They're usually small short term loans that can tie you over in an emergency.

The interest rates on an annualized basis can be in the neighborhood of 400 percent.

Much, much higher, even the most expensive credit cards. But again, there meant to be short term loans.

So you're not supposed to get anywhere near that annualized rate. Unless of course you do.

Because if you can't pay off your payday loan, you might take out another one, a rollover it's called.

And this can get really expensive, really, really, really expensive. So much so that some people think payday loans are just evil.

This guy for instance.

At first it seems like easy money, but the average borrowers ends up spending about 200 days out of the year and debt.

President Obama spoke about the problem last year at Lawson State Community College in Birmingham, Alabama.

He argued that payday loans trap borrowers in a cycle of debt.

You take out a $500 loan at the rates that they're charging at these payday loans.

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