Using a cash advance to relieve financial emergencies is the basis to why short-term loans are so popular. The loan is for a few hundred dollars, it gets deposited quickly and the payoff is meant to keep the borrower form falling into more long-term debt. The harsh part of these short-term loans is that if the full payoff is not completed on the original due date, there is high interest applied to any remaining balance. As horribly as this interest affects people’s monthly expenses, a cash advance lender continues to grow in popularity. The need for emergency cash and the will to spend more, will keep third party money opportunities profitable.

Cash advance lenders do not make profits anywhere near the size of credit card companies.

Long-term revolving debt offers fast assistance for emergencies which a credit card is accepted as payment.  If you really think about most credit card balances, the majority of debt is created by consumption rather than emergency solutions. The intention of having a credit card may not have been to spend more; but for many Americans, the temptation to use the cards for non-emergency purchases has made household debt an exuberant figure. Do credit card companies perform practices which enforce irresponsible spending?

I can’t answer that question in a professional manner, but I can give my response to it as it relates to my own personal situation. Credit card companies tend to look at more than just your credit history to make decisions pertaining to your accounts which will coincidentally affect their profits.

• I have been working diligently at paying down my debt. I found it very interesting that even though I am still facing a deep debt pile, one of my creditors recently raised my credit limit. Are they trying to take advantage of all my hard work in hopes that I will be tempted to make a very large purchase or maybe take my family on a well-deserved vacation? I guess I have fallen into the “good risk” category and might see more offers coming in the mail soon. Now I will definitely need will power to keep myself on the same path to free myself of debt.
• Offers to spend more for enticing incentives offered by credit card companies keep me in the “highly profitable” category. Look how much money these companies are earning from me as I whittle away at my debt each month. Of course I have to use one now and then as unexpected payments come along. I know my paycheck will not support a cash advance, so I choose to use credit cards instead. I know I am lucky to continue to have credit opportunities as I struggle with debt.
• Creditors will look for “bad risk” borrowers, afraid that a new line of credit may make the person more apt to apply for bankruptcy. With all these offers I have been getting in the mail, I applied for a “pre-approved” credit line in order to transfer some debt to a zero interest promotion. My rejection letter came quickly with the excuse that my high debt to income ratio does not support a new line of credit. Ouch! So much for that opportunity. My application gave the credit company permission to look into my credit history and see how much I owe to everyone. not only did I get my pride hurt, but my credit score go knocked down a few more points just by sending in my application – lesson learned.

Credit card companies have eyes all over and will use the information to tempt you to spend more with their card. Revolving credit is a dangerous solution to money problems. When using a cash advance to pay small emergencies, the payoff may cause more problems in the short-term, but keeping long-term debt out of your budget is a more cost effective approach to finances.