Let's just be honest, because we are all adults here. A credit card is the only reasonable financial device there is out there. Men, credit cards are like that gal that hangs out you, watches football and only talks during commercials. Women, credit cards are like that guy who goes to an off Broadway show with you, then engages in deep conversation with you afterwards over a mocha latte. Credit cards are reliable and will never leave you with any deep emotional trauma. The problem comes when you get tricked into relying on Credit Card's evil little financial brothers.
Payday Loans: Wait I Get Extra Paydays?
I know I just made a lot of you cringe out there. If you have had troubles with payday loans before then you know what I'm talking about. If you haven't then listen up! Payday loans are dangerous. Unless you think paying unhealthy amounts of interest is the starter to an exciting Saturday night. We're talking about up to 100%+ interest for one of these. They are called payday loans because you need money before payday, and then you will pay those loans back ON PAYDAY. Best of luck with that. You needed a payday loan because you did not have money. Now, are you going to take out another payday loan to pay off the first payday loan? Let the vicious cycle begin. Even payday loan sites like Personal Cash Advance say in their FAQs, "reliance on payday loans can create serious financial difficulties." Hey, they are just being honest.
Cash Advance: Free Money?
"Money given for you to use at your discretion." Ahh yes, it is as simple as that. Here is some money, have fun, and make sure to buy yourself something nice. Cash advances aren't grandpa. Grandpa will not make you pay back the money for your new shoes, plus money for him to get new shoes! Cash advance can't trick us, they simply just want to replace the hated name of payday loan. It seems to me like someone wants to deny the fact that they are on the same level as a payday loan company. I don't blame them.
Secured Loans: Low Interest?
You might have heard of these when walking into your local bank. They offer a pretty enticing deal when you look at the posters of low rate loans. But there is a definate catch to those tempting deals: Your house, your car, your boat, any item or asset you sign off to them on the contract can be forfeited to your lender if you have issues paying the loan back. Don't believe me? Check out the terms and conditions of the contract or the definition of secured loans. You give the bank the title to your assets and they hold on to it until the debt is paid back in full. Do you want to worry about loosing your livelihood if you have a problem making a payment? Maybe that low interest rate isn't worth it after all...
Unsecured Loans: Possible Answer?
Maybe your thinking of turning to a unsecured loan instead. It doesn't seem that bad of idea at first, but now it's time to look deeper. If you are in need of quick cash, it is likely your credit score isn't that great. Unsecured loans are beneficial when you have a very good credit score, as you will recieve a lower interest rate with a bank that trusts you. What about those with not so great credit? It just like a paydayloan, you will recieve a high interest rate. And even after you go this route with a credit union or your bank, you will end up spending the large lump sum quickly. Credit cards don't give you this temptation.
Credit Cards Welcome You with Open Arms
Listen, the concept of the payday loan or secured and unsecured loans is great. You get money when you need to use how you want. I wish that was something we all could get. But there is a reason why you need to rely on those loans, and I don't think shifting the cost over to quick loans makes the financial burden go away. Credit cards aim to love, not destroy. There is a reason you are extended credit, and not forced to pay overbearing interest charges. We know trouble will arise, and that you need a way to make things easier on you. I do not think anyone sits around wishing they could fall deeply into debt because they enjoy the action. There is a reason you can keep a credit card on you at all times. The card is a mainstay. It will not love you, then leave you on payday and take half your possessions. Rid your life of any evil financial giants, and let a credit card pull you through the dark times.
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Trey Knox
Team Your Credit Network