Times are tough, and if you’re like many people in today’s economy you probably struggle to get your bills paid every month. Too many of us live paycheck to paycheck just to afford life’s necessities. This doesn’t leave much, if any, room for savings, so there’s no protection for when big problems come up like repair or hospital bills. In these desperate situations, taking on a payday loan might seem like a good option to help you make it through to your next paycheck. But have you considered how much a payday loan could actually cost you?

Payday loans are small, short term loans. Unlike many other loans and lines of credit, the cost of a payday loan isn’t given in terms of APR, but rather a dollar amount. There’s a very good reason for this. You can expect to pay around $23 dollars for every $100 borrowed on a payday loan in British Columbia, or $21 for the same loan in Ontario, which might seem like a fairly cheap price to ensure your bills get paid on time. Assuming your loan lasts 2 weeks and you pay it on time, it would translate into an annual percentage rate of 600%. That’s a dozen times higher than the average credit card APR.

The abysmal APR on payday loans is actually only half the story. The fact is, if you’re already living paycheck to paycheck it will be very difficult to get that loan repaid on time. You may be forced to renew the loan five or even ten times before you can get it paid off, incurring more charges every single time. In the worst cases this can end up locking you in a cycle of debt that is very difficult to escape. If you’re already having money problems, payday loans will only exacerbate them in the long run.

When you’re in the middle of a desperate situation it can be difficult to rationally think about your options. That’s exactly how payday lenders stay in business. In cooler times you’d walk right back out the door if your lender offered you an APR of 600%, and that’s still the right move in more dire situations. Look into alternatives like a credit card cash advance, a traditional loan, selling items online, or borrowing from family. Any of these options will save you money compared to a payday loan. Don’t let stress guide you into a poor financial decision.