Need short-term cash but the salary is running out?

That heavily-advertised payday lender Wonga is trying to persuade us all that the new breed of payday lenders provides a community service.

Banks, meanwhile, have been accused of introducing daily fees for overdrafts which make them "more expensive than payday lenders".

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But while online approval for a "lunchtime loan" may give instant gratification, borrowers can pay 30 times more than they need for the thrill.

Andrew Hagger of Moneycomms.co.uk has researched the cost of borrowing £400 for a month, and says: "The variation in charges is far bigger than many people realise."

On a typical agreed overdraft at around 19% the cost would be £6.55 (Barclays), while borrowing on a 9.9% credit card could cost as little as £3.36 (Co-operative). Even for someone with a poor credit rating, £400 of credit could cost under £12 on a specialist credit card (Aqua).

The new-style daily fee overdrafts do not come cheap, though Santander does at least have a £20 ceiling – not so Halifax Reward accounts where the bill would be £31. But even that pales into insignificance against the £118 charge for the same loan from a payday lender (Wonga or QuickQuid).

Hagger says: "Using a payday loan for just three or four days as a one-off can in some cases work out cheaper than paying unauthorised bank charges. However, because the process is so quick and easy and you don't have to speak to a human being to arrange it, people tend to use it more frequently – paying a heavy price for the speed and convenience."

The point is to apply in advance to put a safety net in place. Hagger adds: "Even if your credit score is blemished there are still much cheaper options than payday, with specialist credit cards from Vanquis and Aqua, and while the interest rates may look a little scary, the actual costs aren't that far out of line with some bank overdrafts."

Charlotte Sjoberg at Lloyds Banking Group, which has fee-free overdrafts at Lloyds TSB and Bank of Scotland, said: "Payday lenders think they are addressing a need but if you have any borrowing needs or concerns about cash flow, talk to your bank first, because banks are genuinely in a position to help."