A grad student living paycheck to paycheck named John borrowed $50-$100 every month from the head of the University of Arkansas English department, Dr. Leo Van Scyoc, who was a beloved scholar and WW II veteran. As John’s employer Dr. Van Scyoc essentially granted him a payday advance at zero percent interest, out of his own pocket. John always paid back the loan when payday came, and he avoided the credit trap of payday loans.

Payday loans are notorious for their average high annual interest rates. According to the Consumer’s Union:

“Payday” loans are small, short-term loans made by check cashers or similar businesses at extremely high interest rates. Typically, a borrower writes a personal check for $100-$300, plus a fee, payable to the lender. The lender agrees hold onto the check until the borrower’s next payday, usually one week to one month later, only then will the check be deposited. In return, the borrower gets cash immediately. The fees for payday loans are extremely high: up to $17.50 for every $100 borrowed(1) , up to a maximum of $300. The interest rates for such transactions are staggering: 911% for a one-week loan; 456% for a two-week loan, 212% for a one-month loan.

So, if you like John, have a kind-hearted boss, you may be surprised to discover that he or she will help you out in a pinch. Of course, don’t abuse this privilege. When you get paid, pay back the advance.

For more information, here is a fact-sheet on payday loans.

MiCash doesn’t offer payday loans, but the MiCash Prepaid MasterCard does offer the iAdvance Line of Credit from MetaBank. With iAdvance, provided you have direct deposit set up on your prepaid card, you can take out a small loan for one month (at a cost of $2.50 for ever $20 borrowed or 12.5%) and the amount you borrowed is automatically paid back out of your next deposit. This helps you avoid extending the loan and falling into the vicious cycle of taking out loans to pay back interest on earlier loans. The program is designed for people who want to borrow small amounts in order to build credit history with the one or more major credit reporting agencies.