The average American carries at least 3 credit cards to boost their spending power yet direct cash advance loans online continue to increase each year. Most households will have between 4-7 credit cards with balances. Those who use the short-term loans will often use 5-8 each year in order to keep up with payments. The two are similar by numbers, but there are many arguments over the costs involved with each. Most people would assume that credit cards are the safest money option to use when there is a need to spend beyond the budgeted income.
Cash advance loans online offer quick access to emergency cash.
There are some major differences between fast cash advance loans online and credit cards. They are two completely different money options when it comes to application, terms and conditions. The one major difference which separates credit card customers from short-term loan borrowers is credit score. If you have a good score, you would be more apt to apply for a new line of credit when you find yourself needing extra money. For those consumers poor credit (for whatever reason) the no credit bureau check cash advance loans offer an opportunity to recover from small money emergencies. It’s not so easy to raise a credit score out of the sub-prime category. For many users, the short-term loans are their way to keep their scheduled payments on time.
The price of these online short-term loans is well publicized yet people continue to use them. The fear of falling into a cycle of debt with these lenders is a risk they are willing to take in order to continue keeping their credit history on a positive note. Some reports will scare consumers that one late or missed payment will critically hurt your credit. I would think that any type of ding on your credit history would affect a consumer, especially those with credit scores in reach of a different category.
- If you are just over the sub-prime category by a few points and you apply for a new credit card, your number could fall below quickly. The hard inquiry alone drops a score a couple of points.
- Additional lines of credit, increased credit lines or maxed out credit limits will negatively affect your credit utilization rate (30% of the score calculation).
Trying to preserve every point possible is one cause for the 5-8 repeated cash advance loans throughout the year. The other is that the credit score has already sunk and there are no credit card opportunities left. When fast cash loans are used to maintain the budget when surplus costs arrive, there is a sense of them being cost effective. Consumers are paying a price to maintain their credit while working at raising their score over time.
Of course, problems arise when there is no money left for the payoff for the cash advance. It’s a bit like the problem of credit cards being full. Minimum payments fit much more nicely into the budget rather than a full payoff, but the minimum doesn’t work at lowering the debt. It takes extra money to pay down debt; credit card or fast cash advance loans online.
