Experts warn that people should not be tempted to take out payday loans to pay for holiday expenses.
Tom Tobar said the payday loan he took out for extra holiday spending money fueled a fire that consumed his family's finances.
"We only wanted $1,200," he said. "My kids were little. They didn't need a lot for Christmas."
"It's going to be, I think, a cold January for a lot of families if that's the strategy," said Don Baylor, a senior analyst with the Center for Public Policy Priorities in Austin.
The Tobars' payday loan was one of the factors that led to their bankruptcy. They are finally on firmer financial footing after plowing through bankruptcy for 10 years.
"Bankruptcy sucked," Tom Tobar said.
The father of three said families that can't afford Christmas presents should think about scaling back instead of taking out a short-term loan.
"Maybe you can't get, as my friend says, the GI Joe with the kung fu grip, just the GI Joe," he said. "Your kids are going to love that. But they're even going to love more the fact that you don't have to go and work extra hours to pay for that payday loan."
And spending time with your family may be the greatest gift of all, he added.
Payday lending is big business
Payday lenders are everywhere in North Texas, along the highways, in strip malls and at standalone locations.
Baylor said payday lending in Texas is big business. There are 3,400 payday loan locations statewide, more than the number of McDonald's, Wendy's, Starbucks and Whataburgers combined, he said.
He said he believes payday lenders thrive in the Lone Star because it's a fee-driven business and, in Texas, the fees are not capped.
"Texans pay about 50 percent more than their peers in other states for the same product offered by the same companies," Baylor said.
On average, a $23 fee is attached for every $100 borrowed, he said. That means that a customer would pay an additional fee of $120 on a $500 loan, which translates to an annual percentage rate of about 600 percent when you look at a 14-day loan, which is typical for a payday loan term.
To make matters worse, most people can't pay it back when it's due, Baylor said.
"Three of every four borrowers have to refinance that loan, which means that there's another $120 fee that's tacked every time they refinance, so that kind of begins the churn, which a lot of people call the cycle of debt," he said.
Mary Spector, Southern Methodist University Dedman School of Law associate professor, said she has seen customers caught in the cycle. She works with the school's Consumer Advocacy Project, which assist consumers in areas such as credit matters and debt collection.
"It doesn't take anytime at all before those fees are more than the amount that you borrowed in the first place," she said.
Attorney: Industry is "the Wild West"
"It's the Wild West, you know, still, with payday loans because there [is] little to no regulation," said Reed Allman, a North Texas bankruptcy attorney.
It could be why one company, Alabama-based 88cash.com, hit the airwaves with rush-hour radio advertisements on i93 Hits KLIF-FM. The minute-long ad lures in listeners by asking if they need cash for Christmas or have bad or maxed-out credit cards and then says to "turn your radio up."
The ads go on to say that 88cash.com lenders specialize in "lending cash for Christmas." Approval can be instant, and there's no paperwork, the ads say.
"Get up to $1,000 cash, and you'll be wrapping your Christmas presents tomorrow," the ad says.
The NBC 5 Investigates Consumer Unit decided to take a deeper look into the company. From visiting its website, NBC 5 Investigates discovered that the service is not a payday lender but just appears to connect potential borrowers with payday loans.
The application looks easy -- just name, zip code and email address. But once an email address is entered, the website prompts for personal information such as Social Security and driver license numbers. Experts say those are red flags.
Other red flags, such as grammatical and spelling mistakes, also appear. And the company is run by a person who also operates similar sites 22cash.com, 33cash.com, 44cash.com and 77cash.com. They all offer to connect potential borrowers with payday lenders for fast, easy holiday money.
NBC 5 Investigates reached out to the company's owner. He declined to comment and hung up the phone twice.
Experts told NBC 5 Investigates that 88cash.com could fall into a murky area when it comes to Texas laws and regulations and how lawmakers interpret those rules. Because of wording in its disclaimer on its website, the company also may not have to register with the state.
The Texas agency that regulates the credit industry told NBC 5 Investigates that it is looking into what services 88cash.com provides and whether it complies with Texas law.
In Alabama, where the company is based, the State Bureau of Loans said no state law addresses businesses like 88cash.com but that the company had recently come to the agency's attention.
Payday loan groups say short-term loans are safe option
A spokeswoman for one payday loan trade association told NBC 5 Investigates that payday loans can a safe and reliable credit option, and that there are best practices members should follow.
The Consumer Service Alliance of Texas, another payday lending association, said Texas legislation has checks and balances to protect small-loan borrowers. The organization also has best practices for its members.
"Despite these important safeguards, it is imperative that consumers perform due diligence when shopping locally or online for a small, short-term loan to ensure that the company they are doing business with is a licensed, reputable institution," said Rob Norcross, the organization's spokesman.
But other experts say there are alternatives to payday loans that may be better options.
"A consumer, in my view, should not be afraid to go to her bank, to go to a credit union, to try other means of obtaining the goods and services she needs -- many other means -- before going to a payday loan," Spector said. "It should really be a loan of last, last, last resort."