Cash Advance Loan vs a Credit Card

Most people think getting a payday loans is bad. They carry high interest rates, and you never pay them off. That being said, I would like the challenge this thinking. The industry of payday loans has changed a lot over the years. True for years the payday lenders would charge high interest rates to borrowers. The main reason for this is the default rate on these types of loans was high, so they had to increase the interest rate they charge to cover for nonpayment losses. And they would apply all a borrower's payment to the high interest they had to change. A borrower would never have much if any of their payment applied to the actual loan. So, they would never pay the loan off. That is where the payday loan industry got a bad reputation for putting people of a "debt treadmill". I would like to point out how the payday loan industry has changed. A payday lender wants to lend out money and get their money back with interest. They don't like having to squander their time being a bill collector. That takes time and money. Many payday loans lenders now require a borrower to have a checking account. # 1 they can deposit the loan into their account electronically. And # 2 they can at a set time electronically withdraw the loan amount from that checking account with interest. What is the harm of a borrower borrowing $250 for 4 days. Then a lender taking $260 back 4 days later. The borrower might have needed it to prevent paying their rent late getting charged a $75 late fee from their landlord. Sure $10 to borrow $250 for 4 days might seem like a high rate of interest. I want to point out how the credit card industry operates. We all have received in the mail a credit card application to apply for a card. "0% interest for 18 months" sound familiar? So, people think to themselves "its free interest for 18 months. That's fantastic" and get approved for the card and go out and spend a bunch of money they don't have buying all kinds of stuff and using their new credit card for it all. But they justify it by saying "I have 18 months to pay it off so I'll be ok because I'm not being charged any interest" Each month their statement shows up. Credit card companies operate on a rule of 2% of the balance. If you're balance is $5000 all you will need to do is pay 2% of that which is only $100. The borrower thinks "I can afford to pay just the minimum $100. Its ok because I'll have it paid off before the 18 months of free interest are gone" Then the next month the statement arrives, and the balance is now $6000, and you need to make a $120 payment. This goes on until you have reached your $10,000 limit of the card and your minimum payment is $200 a month and the 18 months of free interest are gone. The problem now is the borrowers 2% payment of $200 is only applying $50 toward the $10,000 balance. The reason for that is the credit card is now charging 18% interest rates. That breaks down to 1.5% a month. So, a 2% payment of $200 on that $10,000 loan. $150 of that payment goes to interest. Leaving $50 paid toward the $10,000 loan. If this isn't bad enough that same credit card company sends that borrower another application for a "balance transfer" at 1.99% for 1 year. Seeing as how the borrower is stuck with that 18% interest rate on that $10,000 balance, they have no choice but to apply for the new card. Do a balance transfer to the new card. The bank charges a "3% transaction fee" on that $10,000 so the borrower borrows $10,300. But its ok because the bank raised the borrowers limit to $15,000. The borrower cuts the old credit card up and starts using the new card. Thinking they are only paying 1.99% interest for a year that isn't too bad. What the borrowers doesn't know if the new card has in the fine print of the application states that "new charges will be put at the back of the loan amount. And lower interest rates will be paid off first" What does that mean? It means that the borrower will have to pay off that $10,300 first before any of their payment will be applied to any additional charges on that card. When as the borrower racks up more and more debt on this credit card and subsequently uses all $15,000 that $5000 they added to this card is sitting at again a 18% interest rate. And of course after 1 year the borrower didn't pay off the $10,300 and that interest rate raises from 1.99% to 18%. Can you see how slippery of a path it can be to have a credit card? Unlike a payday loan where you get a loan, and pay it all off on your next pay check. With a credit card it can go on for literally YEARS!!!!!!! So while the interest rate for a payday loan might be much bigger on an annual bases. The length of time the payday loan is out for is much smaller. Don't get yourself into the credit card game. Get a fast online payday loan and have them take the entire loan amount out on your next pay check and be DONE.

If you are thinking you need a payday loan to get you through a difficult time visit paydayadvancecredit.com.