Final answer:
Options like bank loans and credit cards are ways to work with financial institutions to cover a temporary financial need, but come with interest rates and require a credit history that can affect the credit score. Young adults may find these options challenging due to stringent requirements and less established financial backgrounds.
Step-by-step explanation:
When considering the options to handle a short-term financial shortfall such as needing an extra $200, options that involve working with a financial institution include bank loans and credit cards. Obtaining a credit card from your own bank or a department store is one route, but these come with varying interest rates, which is the cost of carrying a balance. Interest rates reflect the price of borrowing money, and when you carry a balance on a credit card, you agree to repay the borrowed funds plus the additional cost of interest over time.
Entering into an agreement with a financial institution can be challenging for someone just starting out due to a lack of credit history. Credit history affects your credit score, which is a significant factor for lenders when deciding whether to lend money. Additionally, younger adults may find the application process and financial requirements daunting, particularly if they have limited income or financial knowledge.