When you need money fast, don’t fall prey to easy options that can worsen financial troubles.

3 minute read

When money is tight, the many fast-cash options arriving in your mail or available at the payday loan store down the street can look like a quick answer to your financial problems. However, getting cash fast when you’re desperate often comes with a hefty price tag.

For one thing, unless you’re taking out a traditional loan from a bank or other reputable lender, you’ll typically pay a higher-than-average interest rate on quick loans. In fact, some fast-cash lenders charge interest rates so high that they make paying back the loan difficult if not impossible for many borrowers.

So, how can you know which fast-cash options to run from when you need money? Click or swipe to find out 5 avenues to steer clear of when you’re short on cash.

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1. Payday loans

It’s no secret that short-term payday loans are a bad idea. The high-interest loans charge an annual percentage rate (APR) of 390% or higher, according to the Federal Trade Commission.” “Unfortunately, some payday lending operations have employed deception and other illegal conduct to take advantage of financially distressed consumers seeking these loans,” says the FTC.

Instead of taking out a payday loan, find other ways to scrounge up money you need to pay bills. Sell something online, take a part-time job or apply for a credit card with a 0% APR for 12 to 15 months. Then use the card responsibly to pay bills until you’ve improved your financial situation.

2. Title loans

Title loans are just as bad as regular payday loans, since if you can’t repay the loan, your faithful vehicle will end up for sale on the title loan car lot. That’s because in order to get a 30-day title loan, the typical loan term, you must hand over the title to your car or truck.

If you can’t pay back the loan, plus a fee, not only will you have spent most – or all – of the money you borrowed, you’ll also have to purchase a new vehicle, causing you to sink even deeper into debt.

If you absolutely must get a loan and have a credit score lower than 620, consider a reputable subprime lender, which will charge a slightly higher-than-average interest rate but at least could enable you to rebuild your credit if you make payments on time.

Find out: How to Get a Personal Loan with Bad Credit

3. Credit card cash advances

Cash advances on a credit card may be fast, but they’re not cheap. The average cash advance APR is 24.8%, according to a 2020 Creditcards.com review of 100 popular credit cards.

Most credit cards have an average APR between about 17% and 24%, so consider paying bills with your credit card if you don’t have enough money in the bank rather than paying more with a costly cash advance.

4. Borrowing money from friends and family

Borrowing money from friends and family is risky, since if you can’t repay the loan, the relationship could be permanently damaged or destroyed by the violation of trust.

If borrowing from a friend or relative seems like your only option, put payment terms and length of the loan in writing so there are no misunderstandings or hurt feelings later. Then take every measure to pay the money back on time.

5. Credit card convenience checks

When you receive a blank “convenience check” in the mail from your credit card issuer, cashing the check allows you to immediately access your card’s credit line. The quick cash may be just what you need to cover monthly expenses. However, you’ll typically pay a high price for this kind of cash advance.

Convenience checks generally come with high APRs and additional fees, so read the fine print carefully before cashing the check. Better yet, pass on the “convenience” of fast cash with this method, since a high APR, along with cash advance or other fees is the last thing you need when struggling financially.

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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

Published by Debt.com, LLC