The Differences Between Payday Loan APRs and Credit Card and Banking Fees
You need quick cash and you're not sure where to turn. Should you tap into your available credit on your credit cards or take out a short-term payday loan?
Quite frankly, there is no right or wrong decision regarding short-term cash solutions. What may work for one individual may not work for another. The mission of this article is to therefore explore the fees charged by payday lenders, credit card companies and banks so that consumers can become educated when it comes to their finances:
Credit Card Fees
Credit card fees are often tricky for the average consumer to calculate and manage. You have a perfectly innocent-looking credit card in your wallet that is just screaming out to be used when times are tight ' what do you do?
Many consumers use credit cards in a responsible fashion and are able to handle them with ease. Other consumers, however, particularly consumers who find themselves in a financial bind, may become easily overburdened with credit card debt, mainly because of fees and finance rates that spin quickly out of control.
Let's take APRs, for example. It is important to realize that your great, low interest rate can quickly double (or triple) if you are delinquent on just one payment. In addition, late payment fees and over-the-limit fees can quickly turn a small credit card balance into an overwhelming elephant in the room.
In addition, getting a cash advance on your credit card can be extremely costly, so be aware of inflated APRs for cash advances.
It is, therefore, vital to always pay your credit card on time, and to always pay AT LEAST the minimum balance to avoid hefty fees and penalties.
Banking Fees
Banking fees often sit quietly by, waiting for you to bounce a check. Then, when they strike, they strike hard. A recent study by the FDIC found that many bank overdraft fees far exceed other types of short-term loans, including payday loans.
Combine that with the fact that banks are under no obligation to publish their overdraft fees, and you have a disaster waiting to happen if your bank account falls short on any given month.
You must be aware of your bank's fees and overdraft charges, and set up an overdraft protection plan, if possible, to avoid overdrawing your account and incurring large fees.
Payday Lenders
Many payday lenders have come under scrutiny for hefty APRs and fees. Yet, when considering the fees associated with credit cards and banks, these fees are often quite reasonable. For consumers who are looking to secure fast cash to handle personal obligations, a payday loan may be right for them.
It is important, however, to always understand the payday lender's fees and interest rate before entering into an agreement. Just like many other industries, payday lenders compete against one another, so you can often find more reasonable fees just by doing your homework.
When it comes to securing a short-term loan, one thing's for sure: it pays to be educated. Understand your rights and your options so that you can make the best decision regarding your finances.
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Learn more about a cash advance can help you through any financial difficulty. Take advantage of PayDayOne's guaranteed payday advance rates to affordably and quickly obtain the funds you need before your next pay check arrives.