Payday loans or credit card Cash Advance? Which is the most effective?
The need for cash in a moment of need could force us to make costly loans, reverting to withdrawing money from the credit card or exceeding our overdraft limit, as an example. But, you need a quick cash solution. What’s the best choice?
Though specifically designed to serve this purpose the payday loan industry has been criticized for their bad image and for good reason. While it is a fast and simple answer to your financial needs and can help you access the money in a matter of hours, but it comes at costs.
Payday loan companies earn money by offering interest rates that range from to 1,750% so the cost of not paying a loan are huge.
The new payday loan regulations take the market on January 1 in 2015, with interest caps at 100 percent, and default charges being capped by PS 15.
The process of withdrawing money from a credit card always costly, with charges of between 3% and 4% for withdrawals, but in the last instance, they remain a viable alternative.
There will be a charge for interest at the time you take the funds, however when you consider a credit card’s APR not exceeding 30 percent the loan will be lower than the payday loan. The APR of cash advances is usually higher than the average APR for credit cards.
Credit cards are that offer lower interest rates for cash advances. If you are thinking of using these, you might want to consider applying for an advance cash card to make the necessary preparations.
For other costs other than cash, such as food and other essential household goods A credit card is likely to be the best option, so long as you pay the balance off at the end of the period of interest-free.
Authorized overdrafts, credit unions and Credit Unions
Authorized overdrafts are the most affordable method of ensuring that you have an emergency fund. They are also simple to set up.
You must visit the bank through which your salary is made and ask for an account with an option for overdraft. They will conduct credit checks to authorize this.
Another alternative to consider could be credit unions. They are owned by members and provide lower rates for loans of small amounts less than PS 4,000 than the payday loans lenders.