Anyone who has used a credit card before can easily tell you how easy it is to overspend with them. Their initial idea of getting a credit card might be noble, much as what their parents would have told them in using credit cards only for “emergencies” only. The thing is, there are still millions of people around the world with billions of dollars that are owed to the financial institutions that issue credit cards. University studies into the matter have uncovered that the main cause for this terrible level of indebtedness that most credit card holders face is due to two factors, temptation and convenience. It is hard to curb the temptation of swiping your card to purchase something and pay for it later. The convenience of not having to worry about the bill until the end of the month is even worst.
The problem is, even if you listen to the advice of your parents and only used your credit card for “emergency” situations, the problems have already started. Take for example you have a car that has broken down and you need to get it back up and running again so you can commute to work. Technically that would be an “emergency” and would qualify for your credit card to be used. It seems harmless enough even if you promise yourself to pay-off the months bills when they become due. Little do they know that this little charge could be the start of something very nasty.
The problems arise when you are confronted with the credit card bill; instead of having to pay off the whole amount you have the option of paying the minimum and settling the bill the next month. The majority of people will carry the balance and use whatever cash they made from their paycheck to buy other things instead. This is where the revolving cycle of credit begins for the many millions of people. Over a few years and a few purchases on the card and you’ll be paying unnecessary amounts to service the interest obligations which will eventually get deeper to the point that you are financially unable to keep up with the interest payments alone.
This is where cash advance loans or payday loans come in. The interest rates chargeable on these loans are very similar to those of credit cards however they have a built in safety mechanism that will help you avoid the deadly downward credit cycle. Basically cash advance loans do not have revolving credit facility. What you take out on loan this month has to be paid in full the next month. Although it may seem a little annoying at first, it is this lack of a revolving credit facility that will save many people from going under. With cash advance loans you will never have the ability to let your balance slide.
Another feature of cash advance loans that make them more appealing than credit cards is that they aren’t as convenient. With credit cards you can simply take the card and swipe away, there is no safety-net to help you think about your purchase or properly evaluate your current financial situation. With cash advance loans you have to fill in a form and wait a couple of days before the money is made available to you. This is great for you to properly evaluate your purchase and will also stop you from purchasing anything at the spur of the moment. You can basically rule out the “convenience” factor and also put a good lid on the “temptation” factor.
Basically, a cash advance loan product is a very straight short term loan answer to those who need the cash to buy something now but can only pay it back after they have received their paycheck. There are no potential hang-ups that might plague you in the future. Credit cards are extremely useful products however their usefulness normally causes them to be overused and subsequently drains the user unnecessarily.
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