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I’ve done a lot of thinking over the last month regarding payday loans. If you are a reader of my blog you might have heard me mention that I loathe payday loans. But I just can’t let the topic die. I’ve spent many nights thinking about when payday loans are a good idea.

Escaping Payday Loans

Running away is not the answer!

When Are Payday Loans Ever A Good Idea?

After much deliberation, I think it’s safe to say that Payday Loans are NEVER a good idea. At least, that is applicable to 99.99% of the population.

Yeah, not much suspense. So go on, look at other articles or keep reading. I know some financially savvy people will nod their head and say “thanks for nothing”. Some of you might be skeptics might say, “I need more convincing”.

Fair enough. I’ll drop some truth nukes your way.

What if I need money fast?

First, I recommend that you at least plan the week ahead of how much money you need. So if you end up short with a week to go before your next paycheck, plan out for it.

So why does that matter? Well, I created a pretty viable list of the top 8 alternatives to payday loans in case you need cash fast. While some are instant, at least give yourself a few days of buffer time.

Well, the fees aren’t too crazy.

False, don’t be fooled by their marketing. I hear commercials all the time on the radio and they say the following.

“We are here to help you! Most people think payday loans are bad, but think about it this way, if you need $300 for a few days before you get paid and pay us back in 3 days, you only pay us an extra $30

Fun fact: $30 is a lot of money if you aren’t making enough. $30 in fees over 3 days is nuts! You can get a terrible credit card and it took you 1 month to pay off your debt, you would only owe ~$7.

You save $23 using a credit card instead.

But I really need cash fast, like in the next 12-48 hours.

Ok, I’ll throw you one secret life hack. The reason why I would prefer to keep this secret is that practicing good financial habits helps build wealth and if you abuse this, you’ll end up owing more money.

This method will work but don’t use it as a crutch. Keep checking out the blog and I’ll keep providing foundational personal finance material to get your financial life in order.

  1. Get A Discover IT Card. As long as you have okay credit, the barrier to entry for getting a card is low. Do this ASAP. This card will be a godsend once you are approved.
  2. When you need cash and credit isn’t an option. Go to a supermarket/Walmart/anywhere that isn’t a small mom and pop.
  3. Buy some gum with your Discover Card
  4. When you use your card, you will be asked for cash back.
  5. Select the amount needed, you will only be able to take out $120 per day.

You won’t get charged any fees. This beats a debit card since if you have no cash, you can’t take money out of your bank account. The cash taken out will be treated as if it were an item purchase.

Your APR won’t be charged until your next billing statement. But assuming you can pay it off (similar to how you would pay a payday loan), you won’t end up paying any extra fees with minimal to no interest.

So there really isn’t any scenario where a payday loan is a good idea?

Fine, I’LL BITE! I can think of two scenarios where a payday loan is a relatively good idea.

  1. You made a bigger mistake by taking money from someone that was actually from a mob and you owe them money. I would then say taking a payday loan so you can not end up in the hospital is a better choice.
  2. You plan to stick it to the man by getting a payday loan and going off the grid forever. Maybe you’ll end up in the Philippines or somewhere in Mexico. While immoral and not recommended, I respect it.

While this article is primarily for entertainment purposes, please take a look at other alternatives mentioned. I’ll include related articles below so you can make more money in your spare time and don’t end up making decisions based off of the amount of money you have to your name.

Related

Payday Loans Are Terrible Graphic