I need $1,000 in two weeks and I don’t have it. I will get paid from my part-time job at the end of the month, but it will be too late. Therefore, I am considering taking a cash advance on my credit card. Does that make sense? Anonymous ’21.

I am sorry to hear that you are short $1,000 and need the money quickly. Normally, I advise against taking credit card cash advances because they are expensive with annual interest rates in the 20% to 25% range per year. But in this case, it’s not a terrible option because it’s a relatively small amount and only for a few weeks. The $1,000 advance would cost you only $7 or $8 in interest, assuming you pay it all back when you get paid at the end of the month. The key is to pay it back at the end of the month. Don’t let this become a pattern or carry the balance over a long period of time. 

There are a few options to get some cash that would be preferable to a credit card cash advance. The best option would be to approach your job for an advance on your pay. Even if it is not the entire $1,000, anything you could get from your job now would lower the interest you would pay on the credit card advance. Since you work there and, hopefully, are a good employee, they may help you out and let you work off the advance (maybe even with no interest) by taking more hours or by decreasing your future pay.

I am assuming you thought about borrowing from family or friends already. But maybe no one has $1,000 either. Even if you could get a few hundred dollars, it would lower the cost of the credit card advance. Do you have money in a bank account that maybe you can’t or your parents don’t want you to take out? If so, check with your bank to see if you can get a loan based on that money. The beauty of this type of loan is that the interest rate is super small since you are basically borrowing your own money.

My last suggestion would be to ask your landlord if you could pay your rent late or find another bill where you might be able to ask for an extension of a few weeks. With the current COVID-19 crisis, some landlords/creditors will let you delay a payment for a few weeks as long as you end up paying. Your landlord may be OK with it since you likely have given them the last month’s rent in advance. So they have money in case you don’t pay up later.

I hope it works out for you and you can find a way to start saving some money or lowering your expenses so you don’t get into this jam again. Having some cash in case of emergencies is really important as you move forward after college.

Anna Lubomirski ’21: 

As a student, I would be looking for the easiest way to borrow money that also has the most favorable terms. Obviously, family and friends would be the best option to fit these criteria, but I think that landlords and employers are also decent options because of the relationship that you already have with them. It makes sense that banks and credit card companies should be a last resort because of all the expensive terms and general hassle of getting the money in the first place.