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 nastiness comes when you actually receive your credit card bill for the month. More often than not you would have already spent the money that you need to pay off the credit card bill. As such you will either willingly or even be forced to pay off the minimum charge thus carry the balance to the following month. This is where all the problems really start. The revolving cycle of credit has begun and this is where many millions of people world wide get sucked into paying off the interest for their credit card into oblivion. Over a couple of years and a few “emergencies” without having them settled at the end of the month is all you need to build up a downward credit cycle.
This is where cash advance loans come to play. People would not normally associate cash advance loans as a replacement for credit cards but it is actually a very valid use for them as they work very well in “emergency” situations. There is actually a very good case for the use of cash advance loans to replace credit cards so you don’t end up in the credit rut. The first benefit to the use of cash advance loans is that there isn’t any revolving credit facility. You will have to settle your debts every month. You won’t have the option of paying the minimum and letting the balance slide to the next month.
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.
We feel that cash advance loans have been given an unnecessary bad reputation from the financial industry. It is a very valuable product and a great replacement for credit cards if you just want the safety-net for emergency funding. They offer you a way to get money if you need it while not allowing you to carry the balance forward to the next month thus not allowing you to get into a credit rut. Credit cards are extremely useful however they also carry the ability to ruin people if not used respectfully and wisely.
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