When you need to make a payment or you need cash fast there are a few options that you have. Sometimes the decision comes to a comparison between credit cards or payday loans. While they both have their advantages and their disadvantages, most people will go with the credit cards; not necessarily because it is the best decision, but rather because that is what they are familiar with. In some situations that makes sense, but that is not the case all the time. These are a couple of things that you may not realize when you use one form of obtaining cash instead of the other.
When Credit Cards Make More Sense
Credit cards have the advantage that they allow you to make smaller payments through a longer period of time. The interest rate is usually lower, although it all depends on the rate that you are able to get from payday loans companies and from your credit card. If you need to make a payment, but you will not be able to make larger payments within the next couple of weeks then credit cards make more sense. Credit cards are also great if they give you some sort of bonus for purchases. Do not use credit cards for cash advances however because that can have additional fees.
When Payday Loans Make Sense
Payday loans are perfect those times when you have an unforeseen expense that you cannot afford to pay all at once now. That can be to pay your bills or utilities. It is also great for those that do not want to accumulate long term debt. The payments are made in a couple of weeks, sometimes up to a month. If that is enough time to repay the amount that you requested then you should go with payday loans. That way, in the future your debt will not be as high as it would be if you would have used a credit card. Having a smaller debt in your credit profile will increase your credit score in the future allowing you to make bigger purchases such as real estate or vehicles.