Question

In which of the following circumstances would it be wise to take out a payday loan?

A.
You don't know when your next paycheck will arrive in your mailbox.

B.
Your relative died unexpectedly so you need to buy an airplane ticket home.

C.
You saw a pair of jeans at the mall and want them immediately.

D.
You want to spend more at the grocery store than you normally do this week.

Answer 1

B.

Payday loans are extremely expensive and risky. They should only be considered for true, unavoidable emergencies you can repay quickly — for example, an unexpected death requiring an immediate plane ticket. Even then, seek cheaper alternatives first (friends/family, credit card, emergency fund, airline assistance, charities).