Credit Card vs Payday Loan ? How to Choose

You need extra cash to get you through to your next paycheck. You have a credit card in your back pocket, but with all of the related fees, interest rates, and charges, you hesitate before taking it out.

Sound familiar? You may be one of countless Americans who are questioning whether a credit card is right for them. With all of the problems surrounding tight lending standards and the subsequent credit card legislation, many Americans are left wondering if using credit cards is advantageous any longer.
The Truth about Credit Cards

Due to current legislation, credit card companies must now be more forthcoming about their fees, terms and conditions, which is great for consumers. However, credit card companies, still desperate to make money and recover from the bad economy of the last few years, are now finding creative ways to charge consumers. In fact, many credit card experts have found that many credit card companies are finding loopholes in the credit card legislation, thereby allowing them to catch consumers off guard and charge them exorbitant fees.
Feeling Unsure about Credit Cards

What should you do? If you’re like most Americans, all of this confusion over the past year has left you feeling more than a bit disenfranchised about credit cards and the credit card sector in general.

However, that still leaves us with the question: should you turn to credit cards when you need extra cash between paydays?

Although credit cards may still work for you, many individuals have instead chosen to put away the credit cards and turn to payday loans.
The Practicality and Convenience of Payday Loans

Although payday loans have their share of finance charge and related fees, the fact of the matter is that many Americans are more likely to appreciate the convenience, practicality and straightforward nature of payday loans.

In addition, cost has become quite a factor, as credit cards notoriously charge outrageous fees and interest rates for cash advances. Simply put, if you want a cash advance from your credit card, it will cost you tremendously. The interest rates for cash advances on your credit cards can easily be double or triple your standard interest rate.

Also, did you know that taking out cash advances against your credit card may hurt your credit score? It’s true! The major credit reporting agencies view taking out cash advances as a risky financial decision and therefore may lower your credit score.

With that said, you may have considered the advantages of payday loans. Although credit cards allow us to enjoy instant gratification, payday loans are a close second, as many companies provide individuals with their money in as little as a few hours. In other words, if you need quick cash, you can rely on payday loans to provide for you.

Although the decision whether to use payday loans or credit cards is ultimately up to you, it is best to review all of the charges related to both of these sources of cash before making a decision.