If you have ever walked into a cash advances or payday store, then you have seen the signs up on the walls. Check out responsible online lenders’ websites to view fees and interest rates. If you cannot see the rates and the lender is not upfront with a verbal explanation, you do not want to be in business with them. All the stories about bad or aggressive lenders who hand out cash advances using bad practices warn people to stay away from all cash advance or payday lenders. I think that readers need to go one step further and apply this warning to all lenders and creditors. It is not just a short-term loan lender who may not intentionally share the costs of a loan. If you look closely enough, you may find credit card companies intentionally doing the same.
Interest on cash advances do not change while the loan is out.
I wish I could say that about credit card companies. Offers come in the mail with a range of possible interest rates and the only way to find out is to apply. If I do apply and get denied the credit, my credit score goes down a few points anyway. Turn the table, I do apply and get accepted, and only then will I find out what my interest rate will be. There was no sign clearly stating anything on that loan application.
Online cash advances will not vary your interest, but a credit card company will.
Credit card companies will raise your interest rate for any one of these reasons.
- Late payments
- No payments
- Over credit limit
- Carrying a high balance
- Change in company terms
- Credit problems from other lenders displayed on credit report
One of the sad pieces to this credit card puzzle is that when the rates change, they are effective immediately and will apply to whatever balance you have. The long-term credit option just jumped in cost. Unless you have the money to pay off that balance, your monthly minimum payments will go up and the principle will be slower at going down.
Confusing as it may be, all financial institutions need looked through for proper practices. It isn’t just the little cash advance lenders who are misleading the public. You can view their policies. If you don’t understand the math, talk with a customer representative and ask. If the company is not willing to explain their policies, well then that problem should b solved easily, hang up.
The nation is full of debt,, from government to households. It needs to be the best policies of all involved to work at lowering debt while continuing to take care of current bills. People are losing their homes turning unsecured credit (credit card debt) into a secured loan by using a car title loan or equity form their house. If their bad financial status continues, their debt can now risk them losing their home or car.
An online cash advance is a simple short-term loan. It gets money to your account quick when you need just that small amount to make it to the next payday. If you cannot pay it off on time, then you will be responsible for a much larger financial problem. Don’t do business with someone who is not upfront. This should carry over to the credit card companies and banks as well. Make your money work for you instead of paying it out to everyone else.
