Short term payday loans were introduced to help poor credit customers get an instant cash advance in the event of a financial emergency. It is a no credit check loan so approval is guaranteed, provided that the applicant is a U.S. citizen, in full-time employment, over 18 years of age, has a valid checking account and can provide 2 forms of identification. Credit scoring is used by traditional lenders to determine the risk of the borrower defaulting.
When is a Loan Until Payday a Good Idea?
A short term payday loan should only be considered in the event of a genuine financial emergency. Examples include paying the rent, utility bills, emergency repairs, food and essential items. Whilst a quick cash advance can be taken out for any purpose, it is rarely a sensible idea to buy electrical goods, pay for a foreign holiday or make an impulse purchase. The exception to this rule is that person is due a bonus, a lump sum payment or additional income due to working over-time. In this instance, buying an item in a sale for a discount that is greater than the cost of borrowing could be worthwhile.
Alternative Quick Cash Loans
- Credit unions. A non profit organisation that accepts members on the basis of a commonality, such as employment. Subject to affordability, it may be possible to get a short term loan. Credit unions tend to be far more understanding in the event of financial difficulties.
- Pawnbrokers. A pawn shop offers customers an instant cash advance based on the provision of an item of value, such as gold or silver. It is then the responsibility to redeem the item by clearing the principal and any interest that has accrued. A suitable quick cash loan for the unemployed.
- Credit card cash advance. Most card providers allow the customer to use some of their credit limit as a cash advance. Although there is a higher APR and charges, it could be cheaper.
- Overdraft limit. Many people don’t realise that they still have an active checking account. If one can be identified, it may be possible to utilise this facility for an instant cash advance until payday.
The Cost of Short Term Payday Loans
The absence of credit scoring for a quick cash advance means that the lender has to factor in the higher likelihood of default. A loan until payday is also short term which means that there is less scope for the lender to profit. A combination of these factors mean that the cost of borrowing is high. It typically costs $20 to $25 to borrow $100 for a month. Although a no credit check loan can help someone out a financial hole, it leaves less money to pay the bills in future months. It is all too easy to get caught in a cycle of dependency.
Determining how many credit cards someone can have varies from person to person. For some people even one credit card can be too many. A credit card has risks and you can easy go in debt if you can’t resist the temptation to buy things you really don’t need. Some people live from day to day and the risk exist that they spend more money than they can afford and before they realize they can’t manage anymore to get out in debt.
It is really important to know if you can manage to stay out of debt before you consider taking more than one credit card. A credit card looks easy but the temptation to buy will be higher compared with a situation that you don’t have a credit card. In today’s world a credit card is almost a necessity because a credit card has advantages which can improve your quality of life.
A credit card has the advantage that you don’t need to take cash with you if you buy certain items you need and your account will not be credited immediately. For example, if you buy clothes with a Visa Card your account will be credited at the end of the month. You have time to withdraw enough money from your savings account to provide enough money in your regular account before the date your account will be credited.
Determining how many credit cards you need is really difficult. There are several reasons why you best can avoid more than one credit card but there are also reasons why you best can take more than one. It is individual and depends of your current lifestyle. First of all, if you consider taking a credit card you need to have the courage to avoid buying if it’s above your budget. Taking more than one credit card requires more discipline; you need to control all the expenses you’ve done with all your credit cards.
There are certainly reasons why more than one credit card can be useful. An important reason is that some credit cards can offer discounts or other promotions from stores where you regularly buy. Another one is that some credit cards can include a travel insurance which will reduce your expenses if you travel abroad or you may have other benefits which you can’t enjoy with other credit cards. The fees of your credit cards are also important; sometimes you will have more benefit with more than one credit card because some transactions abroad can be cheaper with a particular credit card than the one you use in your hometown. In this case you can best consider taking more than one credit card.
The greatest risk if you have more than one credit card is that you don’t check the expenses you’ve done with all your credit cards. You will easier forget to check the one which you rarely use and you may not have enough money on your regular account. The consequence is that you will be charged with an interest rate which can be higher than 20%. Another risk of having many credit cards is that you often don’t notice when these which you rarely use are stolen. You may have lost a lot of money before you realize that you lost your credit card and you can be too late for reporting it to your credit card company.
Determining how many credit cards is too many is often a difficult decision; if you don’t go frequently abroad it is best to limit the quantity of your credit cards. You can also best compare the fees of the credit cards and some banks offer credit cards for free if you have a certain amount in a savings account. It is best you compare the advantages and disadvantages of your credit cards and you will soon realize if you have enough or too many credit cards. A credit card is useful but you need to be precautious if you use one or more. The most important reason is that you can handle to manage tracking all your expenses and if you can stay within your budget with more than one credit card.
Determining how many credit cards is too many is a personal choice but you need to be aware of all the possible consequences which can cause a financial disaster. Your lifestyle is important to know how many credit cards you best can have; there is no magic number which is good for everyone.