Paycheck Advances vs Cash Advances

2007-03-08 10:33:40

( Financial )



There are times when our expenses and our bills become too much for us to handle. With the accessibility of online banks and the flexibility of your credit cards, you are tempted to take paycheck advances or get a cash advance from your credit card to pay your bills. There are certain advantages and disadvantages for both options. You have to consider them both before you decide on which loan to get.

An ordinary consumer usually has a few credit cards ready for use. Getting a cash advance from your credit card is as simple as going to an automated teller machine and punching in your pin code. It is fast and easy. It is also very convenient because you do not have to send in any application forms and you can have money instantly.

Paycheck advances do not have the same convenience as a cash advance from your credit card. Paycheck advances require you to call a lending institution and to submit an application. The money is deposited into your account the very next day. Paycheck loans are not as fast as a cash advance, but it is still faster than getting an ordinary loan from your bank.

Cash and paycheck advances can get you money in a short amount of time. However, there are big differences between the two. Paycheck advances require you to pay back the full amount of the loan on the next pay day. The interest rate imposed on a paycheck loan is significantly higher than an ordinary loan.

Cash advances from your credit card do not require you to pay the full amount on your next pay day. You can just pay the minimum amount required by your credit card company. However, the longer you keep a balance on your card, the more interest you are going to end up paying.


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