Credit Cards vs. Payday Loans

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When times are tough between paychecks, everyone has a different reaction. Many people choose credit card debt, while others choose payday loans for their financial emergencies. Traditional loans from banks and other lenders can take too long to process – however, payday loans are available same day for the majority of recipients. It is important to understand sources of debt, like payday loans and credit cards, before you rush to use them for emergencies. By considering the advantages and disadvantages, you can make the best financial decision for you.

Do you have a credit card? If yes, what is your available credit line? If your credit line is small, or you do not qualify for a credit card, then a payday loan may be your source of income to bridge the gap between paychecks. If you are thinking of applying for a credit card to have that source of emergency income, remember that it can take a long time to get approval and receive the card. The card can also be a source of anxiety, or could give you a false sense of wealth, after you have paid your debts. You may also not get approved for the amount you need. Payday loans are much faster – most people are approved same day – and you typically get approved for the amount you need. Click here for further details.

Interest charges on credit cards can really add up over time, too. This means it could take you months to pay down the credit card, and you will spend a lot more money on this debt. Late payments are harshly penalized on credit cards. Payday loans, in contrast, are meant to be for short-term solutions, so you get back on your feet. Companies that offer payday loans will inform you about interest rates, so you can plan ahead for your payments. Lenders are available to work with you, if you find you have a hard time paying down the loan.

If you are in debt to a company that only takes cash, payday loans work much better than credit cards. Although some credit cards allow you to take out cash at an ATM, payday loans give you cash in hand right after you are approved. Or, you could take a check to your bank and deposit the payday loan, to prevent overdraft fees. Credit cards can’t do that for you.  You may also watch http://www.youtube.com/watch?v=L-fvcTgv1_Q  for more ideas about loans.

Before you completely accept a payday loan, understand how this amount of emergency money will impact your budget. You can then work with the lender to set up payments that make sense for your income level and paycheck timing. Credit card companies don’t work with you so personally – they just make you pay your bill once a month. There are benefits to both, but payday loans work better for most people. Go here to inquire.

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