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Why Payday Loans Are Better Than Your Bank Account

Written By renie kolo on Friday, February 22, 2013 | 12:56 PM


Everyone faces a situation in life at one time or another where they need money quick. While some of us have someone to call in a financial time of need, like friends and family, many of us aren't so lucky; or we find our loved ones are sadly in a similar situation as our own. When it comes to money matters, money matters, and it's as simple as that. Financial problems can cause panic and many people don't know how to handle their finances already; well that gets worse when a problem arise.

Think about all of your options.

Instead of using bad judgment - which is very likely to happen during financial strife - and ruining your credit or risking a possible bank overdraft, a better idea is a payday loan. Here are the major advantages payday loans have in comparison to other options that may get you in more trouble financially than you may be having in the first place:

* Payday Loans vs. Credit Card Cash Advances - The most important thing to understand about credit cards is they have variable interest rates for different types of activities. While a cash advance from your credit card company may seem to be a great solution to the problem you are facing, the interest rates go up with cash advances. Credit cards are known for their already high interest rates, but in comparison with a payday loan, a credit card cash advance's rates and fees associated are often much higher.

* Payday Loans Vs. Over Drafting Your Bank Account - Many people believe that payday loans require outrageous fees in order to get the money, however, while the interest rates and finance charges can see very high, they are typically not as much as a possible over draft could be.

Most banks will charge you at least $30 for each time that you over draft your bank account, and will add $5 a day to your invoice until the balance is brought to zero. Also, some banks don't even cover your over drafts, leaving you to write a bad check that you could potentially face charges for in the long run. While bank accounts are a great financial product, they don't always offer the best benefits, especially if you need money quickly.

Since payday loans are such short-term loans, you don't really have to worry about the finance charges being high. Yes, they're high - but it's because these businesses are taking a big risk with their customers, often times taking their word for it that they will get paid back. These services charge high because they need to; clearly, what they aim to do is help those who need it most.

These fees don't amount to much because they are so short term, in comparison to the total money spent on bank fees or credit card fees. Payday loans are a good option for people who need money quickly, but always remember to use these responsibly and only take them out if you can pay them back by your promise

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