Why Do People Take Pay Day Loans Instead of using their Credit Cards? We live in a credit driven society – yes that’s right let’s face it, everything has become alltooeasy just swipe that little piece of plastic and give ourselves a little bit of time off from thinking about how much that item is going to cost us in the end. Purchasing things in such a way makes us not think about whether or not we really need or can actually afford what we are buying. Speaking of debit cards, making a purchase seems much better since we don’t feel the pain of handing over cash and experiencing the effect of our liquid cash getting less.
This doesn’t mean that a person should abstain from using their credit or debit card. But if not used properly and responsibly, plastic payment tools can be beneficial but not always. Credit also provides security for unforeseen expenses like car repairs and trips to the dentist. But what if you’ve crossed your cash limit? It’s just a matter of getting by until payday and having a financial means to fall back on. Mainly the problem comes when purchasing with plastic becomes a financially unsupported habit and a longterm debt issue. Some consumers may find themselves not being able to keep up with payments and overthetop balances. That is when “insufficient funds” fees, late charges, and the costs of going over credit card limits start a nasty domino affect on one’s finances. Payday loans can provide overnight funds for someone who needs cash in their bank account quickly and without any questions being asked. While borrowers will be faced with interest and fees to take out one of these small dollar shortterm loans, the costs associated with what it may cost a person when the bank and credit card charges have been assessed could far outweigh what a payday lender will charge. Generally people use this kind of loan in comparison to a credit or debit card is because of the following reason: • • • • • • •
To handle any unexpected bill or pay for repairs to house or car; To get through the end of the month till the next pay day; Avoid borrowing money from friends and relatives; Take care of an unexpected expense such as a huge car repair bill or roof collapse which needs to be done on an urgent basis; Meet some medical emergency or hospitalization; Take care of financial expenses in case of death in the family Any emergency which needs immediate finance.
Now lets look at what pay day loan lenders have to offer: • • •
Ease of application and disbursement of loan in which the turnaround time is few hours or within 24 hours; Flexibility of repayment as in case of non payment the loan can be rolled over; Traditional credit checking after which the loan is sanctioned.
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