The following information looks at both cash advance payday loans and late fees that companies like credit cards charge, to give people some insight that could help them make the most out of their financial matter.

Cash Advance Loans: These are short term loans that are given to people without any credit check, and the money is deposited directly into their bank account within hours.

How do cash advance pay day loans work? People can get cash advance pay day loans on the Internet or in person with nothing more than their bank checking account and ID. The cash loan is secured using a bank account number and borrower gives the information to the lender and gives them access to the borrower’s bank account. Lenders can guarantee that the loan will be paid back by having the checking account information and ability to take the money when it is due. Instead of charging interest, lenders charge a fee for the service. The service fee can vary from state to state so it’s good to check with the local laws before getting a cash advance pay day loan. Most states have regulated fees between $15 – $25 per $100 borrowed. Which means that if a person takes out a $100 cash advance loan, they would need to pay back $115. A $15 dollar fee for the convenience of having $100 deposited directly in a bank. However, the full loan amount needs to be paid back by the next payday, or within 2 weeks, and thus the reason they are called a short-term loans. However, for a person that has to pay bills, and the bills charge late fees, paying a $15 fee instead of the late fees doesn’t sound so bad, or does it?

How late fees work? Late fees are charged to people when the don’t pay their bills on time. Most companies, like credit cards, will charge some sort of late fee, and the fees can range from $10 to as much as $50. Most credit companies will charge between $25 – $40, and they don’t care what the balance of the account is or the amount due on the bill. This means that even if the amount owed is only $25 and a person pays late, the credit companies will still charge the same late fee. In addition, if a person has a couple of these types of accounts due and doesn’t have the money to pay them, they will be charge several late fees that could total as much as $100 or more. In addition, they still need to pay their bill that is due, but is now due at more money. Plus, when a person is near their credit limit, and they pay late, the credit company charges the late fee on top of their balance, and if the fee puts the account over the limit then the person will be charged an over the limit fee as well. This means that not paying a $25 bill on a credit card could result in a $40 late fee, plus a $40 over the limit fee, for a total of $105. Now, the next bill comes due and they have to pay the $105 plus the next month’s bill of $25, for a grand total of $130.

Looking at these two financial situations, the person who pays the late fees haven’t gotten anything from the money they paid. Instead, they are paying $80 in fees, and $30 in balance payments, whereas with a payday loan they would get $100 upfront to do what they want. The person can pay their $15 bill, saving them $80, and still have $85 dollars in their pocket for some fun until the next pay day.

Another big advantage between cash advances and late fees is the credit history. If a person doesn’t pay their bills on time it will give them negative credit marks, making it harder for them to get good financing in the future. Whereas, a payday loan doesn’t go on credit report and the person is able to pay their bills on time keeping their credit history in tact. Even if a person doesn’t pay back their payday loan on time, they will be charged additional fees, but it won’t effect their credit report or even show up on their credit history, versus a credit card late notice which does impacts a person’s credit score.

If a person has to decide between getting a cash advance pay day loan today or paying late fees tomorrow, the better choice would be to get the cash advance today and start paying bills. Credit history is not something to mess around with and not paying bills is the worst thing a person can do to their credit. In addition, the late fees charged by the credit card companies are enough to put a person further into debt as they try to make their bills and keep up on the late fees.

Don’t wait till it’s too late, get cash today and pay the bills on time instead of paying late fees.

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