Question

Jonna is considering using a refund anticipation loan to have money for a deposit on a Caribbean vacation. What are two alternatives she should consider before using this type of credit?

Answer 1

Jonna should consider saving money in a savings account or investing in a certificate of deposit (CD) as alternatives to using a refund anticipation loan for her vacation deposit.

Step-by-step explanation:

Jonna should consider two alternatives before resorting to a refund anticipation loan, which can be costly and risky due to high interest rates and fees. One alternative is to save up for her vacation over time. She could create a budget to set aside money each month into a savings account specifically for her vacation. This would allow her to earn interest on her savings rather than paying interest on a loan. A second alternative is to consider a certificate of deposit (CD), which can offer higher interest rates than regular savings accounts. With a CD, the money is deposited for a fixed period and would require Jonna to plan her vacation for after the CD’s maturity date to avoid any early withdrawal penalties. Both of these alternatives encourage better financial planning and can save money in the long term compared to the immediate but expensive solution of a refund anticipation loan.

Answer 2

She and her nephew enjoy an afternoon at the zoo.
Her project will be late.
She could lose her job.
She will save the cost of two zoo tickets.