Credit Cards Lose to Cash Advance Loans
Most of us are quite aware that credit cards although very convenient and can help you during times of need can also be a very deadly weapon in the hands of someone who doesn’t understand of respect the responsibility it takes to hold them. This is evidenced by the many millions of people around the world that have been swallowed by credit card debt and are unable to get themselves out. Many people mistakenly think that they will obtain a credit card for “emergency” purposes but it is always with the most noble of intentions that problems arise. Most credit card holders will face two major problems, namely the temptation of using the card and also the convenience of it. Combine these two strong factors and you have the recipe of overuse.
Even if you are following the advice of your parents and keeping the credit card just for emergencies there is still a good chance that it can bite you where it hurts later on. Say you have a leaky roof that needs some repair however you don’t have the cash to do that at this moment, you can technically classify this as an emergency and thus charge the repair cost to your credit card. This seems harmless enough as you tell yourself that you are going to payoff the debt that you have accrued when the bills come.
The problems actually start when you receive the bill for your “emergency” expense. You will have the option of either paying the bill in full or you can simply let the bill slide and pay off the minimum charge. Most of the time you would already have used the money you received from your paycheck to buy other things and really not have enough money to pay off the full balance so you end up opting for the cheap option of paying the minimum only. This is basically how the revolving cycle of credit begins and also where many millions of people start their endless chasing of credit. Over a few months with a few unpaid emergencies you will realize that your interest charges are phenomenal and that you are finding it harder to just pay of the minimums every month.
This is where cash advance loans come to play. People would not normally associate cash advance loans as a replacement for credit cards but it is actually a very valid use for them as they work very well in “emergency” situations. There is actually a very good case for the use of cash advance loans to replace credit cards so you don’t end up in the credit rut. The first benefit to the use of cash advance loans is that there isn’t any revolving credit facility. You will have to settle your debts every month. You won’t have the option of paying the minimum and letting the balance slide to the next month.
Another feature of cash advance loans that make them more appealing than credit cards is that they aren’t as convenient. With credit cards you can simply take the card and swipe away, there is no safety-net to help you think about your purchase or properly evaluate your current financial situation. With cash advance loans you have to fill in a form and wait a couple of days before the money is made available to you. This is great for you to properly evaluate your purchase and will also stop you from purchasing anything at the spur of the moment. You can basically rule out the “convenience” factor and also put a good lid on the “temptation” factor.
Basically, a cash advance loan product is a very straight short term loan answer to those who need the cash to buy something now but can only pay it back after they have received their paycheck. There are no potential hang-ups that might plague you in the future. Credit cards are extremely useful products however their usefulness normally causes them to be overused and subsequently drains the user unnecessarily.