Payday Loans and Fast Cash Guide

Credit Card Cash Advance

A credit card cash advance is a reliable way to get fast cash.  It certainly has its risks, but if you have a credit card it’s always available.  When used responsibly, there is no reason why a cash advance on a credit card should be avoided.  This article will look at how they work and how to make sure they aren’t abused.

The main benefit of a cash advance on credit cards is that money can be had “on demand.”  All you need is an ATM that accepts your type of card (Visa, Mastercard, etc.) or call the phone number on the back of the card to get your money.  If you call the number on the back of the card, your money will usually be transferred directly into your bank account.

Credit card cash advance fees are very high.  There will usually be a fee that you pay when the money is received, and a monthly fee may also be charged for using it, and the fee is usually the same no matter how much you’re advanced.  Some credit cards offer awesome deals on cash advances, but unfortunately most don’t.  The credit card companies that charge higher rates will usually charge higher interest than your APR on purchases, so you’re getting the double whammy.  To make things worse, when interest rates are tiered like this your monthly payment will go toward paying the lower APR first, and let the higher interest part keep building up.

In order to make sure that you don’t abuse cash advance credit cards and put yourself into worse debt, do your best to not use that card again until the cash advance is paid back.  This will help keep your balance lower and allow your next monthly payment to pay towards the advance rather than the purchases that you would’ve made.

I’ve read stories of people taking a cash advance from credit cards to pay their credit card bill!  I don’t think I need to tell you how bad of an idea this is, but when it comes to money people can do some dumb things.  Another place where cash advances are seriously abused is at the casino.  With the hundreds of ATM’s on the floor and the slight chance of being able to make more money, people easily fall into this trap.  I did it once, and regretted it after the hangover wore off!  Please don’t become a funny story like this and use your cash advance responsibly!

When used responsibly, credit card cash advances are another great way to get fast cash when you need it.

Thanks for reading,

Lydia

7 Reasons A Payday Loan Is Smarter Than Using A Credit Card

Payday loans get a bad rap, but much of it is unjustified.  The credit card companies don’t want you to know which situations a payday loan makes more sense than whipping out the plastic or getting a cash advance.  I’ve talked about credit card cash advances here on Fast Cash Authority, but their use is very limited.  Payday loans are one of the best ways to get fast cash and, when used responsibly, are a very smart financial move.

Before we go on I should probably state that I don’t work for a payday loan lender, I don’t have sites in payday loan lead generation, or really have anything against credit cards.  I just want to share my experience with you.  There have been many situations where I had to decide if I wanted to charge something or get the cash from a payday lender.  I didn’t always make the right choice, and through my mistakes I’ll share what I learned.

There are many reasons why a payday loan is a much smarter choice than using your credit card, but these are my favorite.

1. No Credit Check – In 2007 110 millions Americans had bad credit.  With the economy taking us on the roller coaster we’ve been on, I’m sure that number has gone up quite a bit.  Since most payday loans don’t require a credit check they don’t affect your credit score in any way.  If you make the mistake of not repaying a payday loan you deal with collectors without an effect to your credit score.  Missing a credit card payment is going to tank your credit score.
2. Easier To Budget – If you have $400 in your hand, it’s much easier to figure out the best way to spend it than it is to deal with credit card balances.
3. Less Risk Of Dependence – Having a credit card in your wallet is a risky move.  It’s simply too easy to pull it out, swipe it, and walk out with you newest fancy.  With a payday loan you actually have to get off your butt and go to the store to get it.  The time it takes to put on your pants and get out the door is going to give you 10X the time to decide if it’s a good decision than it takes to whip out your credit card.
4. Cheaper Than Late Fees – Payday loans are pricey, but they don’t have anything on a credit card late fee!  If a payday loan costs you $25 for every $100 borrowed, it will cost you much less than the $40 credit card late fee and won’t ding your credit score.
5. No Long Term Relationship – With a credit card company it can be very difficult to sever your relationship when you’ve had enough.  Obviously you have to pay your balance, but closing an account isn’t very easy.  With a payday loan, you pay the loan back and you’re done.
6. Save Money Over The Long Term – Having the option to pay back the minimum amount on a credit card gets people into debt trouble all of the time.  If you’re only paying the minimum you’re already in trouble and with a $500 charge you’re going to pay more in interest than if you would have used a payday loan.  With an APR of 15% and making the minimum payment on a $500 charge will cost you $150.87 in interest, according to bankrate.com’s minimum payment calculator.  The average payday loan rate is $25 for every $100 borrowed, so that loan would only cost $125 in interest.  Not having the option of making small payments also prevents lots of people from falling into the debt trap with payday loans.
7. Cheaper Than A Credit Card Cash Advance – Credit card fine print gets pretty “fine” when it comes to cash advances.  They will go to great lengths to prevent the average person from understanding how much they’re going to pay if they choose this route.  The interest rate on a cash advance is usually a few points higher than the purchase rate, around 22%.  Here’s where it gets really tricky, many credit card companies will apply your monthly payment to purchases first and cash advances next.  This means that if you carry a balance you’re going to be stuck with the high APR racking money up each month.

I’m sure that there are lots of people that will disagree with me on this, that’s fine.  I know from my own experience that there are lots of times that a payday loan is better than a credit card.  If you think I’m wrong, let me know in the comments!

Thanks for reading!

Lydia

Getting Cash From A Credit Card

Getting cash from a credit card is something that many people forget about when they’re in need of fast cash.  I’ve written before about credit card cash advances, and their pitfalls, but for some situations it’s the best way to get the money that you need.  You’ll end up paying more interest on a credit card cash advance than you would on a normal purchase, but you have the option to repay it over an extended period of time.  This is a clear benefit over a payday loan or title loan, but still use these cash advances very carefully.

In order to get cash from a credit card you (obviously) have to be below your credit limit on the card.  To get cash you’ll need the pin number that you received when you first got your credit card.  You probably don’t know it off the top of your head or don’t know where your original paperwork is.  In this case, call the customer service phone number on the back of your credit card.  They’ll put you through a long process to determine you’re actually the owner of the card, but they’ll eventually cough the number up.

Once you have the pin number all you have to do is go to an ATM that has the logo of your credit card (Visa, Mastercard, etc.) and follow the instructions to get cash with your credit card.  Some ATM’s are going to put a $300 limit on the amount you can withdraw.  In this case you can either call your credit card company (again) to get them to raise the amount or go inside the bank to see what they can do.  Most banks will not have a problem with your credit card cash advance, but be prepared to go through a long process to prove your identity.

The fees are certainly high on a cash advance.  You’ll first have to pay the two or three dollar fee at the ATM and then pay interest through your credit card company.  Some credit card contracts have a clause that says that when you make a payment the money goes towards paying for purchases first and advances second.  This means that if you have a total balance of $300 and $200 is from purchases and $100 from advances, a $250 payment will pay off the purchases and only $50 on the advance.  They do this because the interest rate is usually higher on the cash advance.

Getting cash from a credit card can help you out in a pinch, but I recommend checking out some other avenues first.  In the end you’ll have to pay it back, so it’s a good idea to see what other ways you can get fast cash cheaper.

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