Payday Loans vs Credit Cards.
Payday Loans vs Credit Cards
Q. Which is better? A cash advance from your credit company or a payday loan?
The largest factor influencing the use of credit cards and payday loans are the interest rates that are applied to them.
A credit card is an ongoing line of credit used to make purchases of any amount up to your credit card limit. A credit card cash advance is usually treated just like a standard purchase, so the repayment terms usually follow the policies of your credit card. However, some credit card companies charge higher interest on cash advances than that of standard purchases, such as a daily rate compared to that of an annual rate. Therefore a cash advance on a credit card, depending on your credit rating and the terms of your credit contract, may in fact end up costing more in interest over a longer term than that of a short term payday loan despite the difference of interest rates between the two.