The financial tool known as the cash advance is often written off by the uninformed as a scam or a one-way ticket to debt. However, this could not be further from the truth. If you treat it with responsibility, a cash advance can get you out of tight situations with minimal drawbacks.

So what is a cash advance?

A cash advance (or a payday loan) is a short term loan that has relaxed credit requirements and a high interest rate. The intended purpose of a payday loan is to be taken out a few days before a payday and then paid back immediately after the paycheck has been received. In the event that a cash advance is not paid back in short order, fairly high interest rates will rapidly add up to a pretty substantial debt.

Is it a worth it?

A payday loan has a very specific and valuable use for many families. When confronted by spontaneous financial need (such as a sudden injury or a car accident), many families are simply unable to foot the bill. Payday loans, when used responsibly, allow families to handle whatever life throws at them.

So how do you responsibly use a cash advance?

In order to be responsible, you will need to create a precise and rigid plan for paying the money back.

Your first step should be to determine exactly how strong your need for the money is. If you absolutely need to have this money right now and not in a couple of days, then you should consider a cash advance.

Second, you will need to ensure that you take only the absolute minimum amount of money for the cash advance. The lower the initial cash advance is, the easier it will be to pay back in the future.

Once you have determined that your need is great enough, you need to identify your goal for paying the money back. Ideally, you will want to pay the money back on payday and not a day later. However, some circumstances can often prevent such perfect scenarios from happening. Carefully budget your finances so that you can identify the earliest possible moment to repay the debt.

Once you have a solid plan, all you need to do is execute it. This is easier said than done, but a cash advance from a place like Cash Depot Inc. can be an extremely helpful tool if you use it wisely.