A recent Bankrate survey found that 63 percent of Americans who don’t feel completely financially secure say high inflation and rising prices are their biggest obstacle to achieving this. Although things have slowed down since inflation peaked last June, consumers are still feeling the pinch, with many turning to loans and credit to keep up with everyday expenses.

Payday loans are short-term, high interest loans that are meant to be repaid on your next payday. They are easy to get but difficult to pay off, often coming with hidden fees and extremely high interest rates. Payday lenders are known to set up storefronts in low-income areas and can launch people into a cycle of debt.

While not all payday lenders are predatory, you should consider alternative options before getting a payday loan.

The impact of rising inflation

Inflation in the U.S. hit a 40-year high last June when the consumer price index (CPI) increased to 9.1 percent, year-over-year. Rising prices put a strain on Americans’ budgets to the point that 57 percent of adults say they wouldn’t be able to cover a $1,000 emergency expense using their savings.

Although inflation has begun to slow down, with essentials like gas becoming cheaper, food and shelter prices are still high.

Consumers are getting a break at the gas pump, but not at the grocery store. Food prices, and especially costs for food at home, continue to soar, rising at the fastest pace in more than 43 years. The drop in gasoline prices has been very welcome, but that doesn’t solve the inflation problem. — Greg McBride | Bankrate Chief Financial Analyst

Inflation leading to interest rate hikes

To combat this rampant inflation, the Federal Reserve has hiked interest rates a total of 10 times over the last few months. Although the Fed didn’t raise rates again at its latest meeting, there’s speculation that consumers may face two more rate hikes before the year ends.

That means borrowers can expect higher interest rates and tighter eligibility requirements when it comes to all lending products, including personal loans. This also does not bode well for those looking for payday loans, as these loans already have considerably higher rates than conventional personal loans.

Should I take out a payday loan?

Payday loans can be very tempting if you are experiencing financial hardship due to inflation and need money fast. If you can find a payday lender that offers decent rates and you are completely confident you will be able to pay it back when your next paycheck comes, it could be a viable option. However, there are many risks to taking out a payday loan, and you should only do it as a last resort.

Payday loans come with fixed interest rates, meaning that the rate you pay does not change over the life of the loan. They are designed to be short-.. loans that help people cover necessary expenses between paychecks or emergency expenses. Payday loans are typically for smaller amounts, $500 or less on average. However, they come with sky-high interest rates. The average two-week payday loan comes with an APR of nearly 400 percent. In comparison, the average APR for a regular personal loan is just below 11 percent.

The dangers of payday loans

Payday loans can entice borrowers with bad credit because most payday lenders do not run a credit check. However, taking out a payday loan can further damage your credit and put you in a cycle of debt that may be difficult to escape. It is extremely common for payday loan borrowers to have trouble paying off the loan by the end of the two- to four-week loan term, causing them to take out an additional loan to make the payment deadline.

Almost 1 in 4 payday loan borrowers take out additional loans nine times or more after the first loan. Low-income communities are particularly vulnerable to payday lenders, and Black and Latino communities are disproportionately targeted.

Alternatives to payday loans

There are several alternatives to payday loans, even if you don’t have strong credit.

Credit cards

There is no minimum credit score to qualify for a credit card, although individual cards will have requirements. While you shouldn’t make a habit of racking up credit card debt, using a credit card to cover expenses is a better option than taking out a payday loan.

Credit cards have much lower interest rates than payday loans, with the average credit card interest hovering just under 21 percent. You also have a longer repayment period since credit cards give you up to 30 days to pay off your balance before it incurs interest.

Personal loans for bad credit borrowers

Online personal loan lenders tend to have quick approval and fund delivery times, and many online lenders are open to working with bad credit borrowers. While bad credit borrowers are likely to receive a lender’s highest interest rates, most personal loan borrowers cap their APRs around 36 percent, still much lower than payday loans.

If you are interested in taking out a personal loan, you should compare top lenders and prequalify with a few before making a decision. It is also worth looking into small personal loans, especially if you do not need to borrow a large sum of money.

Borrow from a credit union

If you have time to join a credit union and go through the application process, borrowing from a credit union could be a valid option. Credit unions tend to have lower interest rates than traditional lenders, and many offer payday alternative loans (PALs) that let you borrow $200 to $1,000 for one to six months. These loans have an APR cap of 28 percent.

Emergency relief services

If you need help right away, there are federal and local programs available to help. For example, the Emergency Rental Assistance Program is set up to help families cover rent and utility costs in times of need. If food costs are a concern, it could be worth visiting your local food bank to ease the burden. It is also worth checking if your local community has any community service agencies that offer help with expenses like rent and back-to-school expenses for kids.

Alternative ways to earn income

If you have items you’re willing to part with and need money for necessities, it could be worth selling things like clothes and jewelry online or at a pawn shop to earn extra income in a pinch. If you have an extra room in your home, you could consider renting it out through Airbnb or getting a roommate to reduce rent or mortgage costs.

Bottom line

As inflation remains above normal levels, people are struggling to pay their bills and looking for ways to supplement their income. While payday loans are a quick and easy way to get food on the table or fill your tank with gas, they are incredibly dangerous.

A payday loan could launch you into debt and ruin your credit. If you are struggling financially and considering a payday loan, think about the alternative solutions listed above and see if they will work for you before making that decision.