Quick payday advance v Bank Credit Card

Most of us are persuaded to take out a credit card by a bank or by advertising. We are told that a credit card is nice to have in case of emergencies. However, credit cards are designed so that once a borrower puts a few purchases on to their card; they can be easily tied in to long term debt at relatively high interest rates.

There are lots of ways in which a lender can make money on a customer who takes out a credit card. For example, they might offer the customer the attractive option of just repaying interest but not repaying the balance on the card. That means their debt remains unpaid (often even increasing over time) and instead of lowering their debt, the customer pays a small amount of interest off each month. Many cards also have incentives or points schemes, so by racking up more credit card debt the borrower might feel as though they are collecting points. After a while it can seem as if there is no end in sight for some borrowers, who may not know what date they will be able to fully pay off the debt associated with their card.

Quick payday advance loans are different because they address the original purpose of most credit cards quickly and efficiently. If the original purpose of the credit card was 'for financial emergencies' a payday advance can be used for that purpose whenever it is needed. If someone finds they are short of cash before their salary reaches their account they can apply for a quick payday advance and if they fulfil the eligibility criteria they could have a loan within hours of applying.

Fast payday loans - Paid back fast

Unlike credit cards, instead of stretching out the debt over months or years quick payday advance loans are paid back on the borrower's payday, usually within a few weeks or even days of being taken out. This means that although the rate of interest is higher on a payday loan, because the term is shorter with a payday advance they can work out cheaper for many people.

There is another advantage that payday loans have over credit cards. Many people who commit to credit cards find that they default on repayments or pay late which leads to additional charges and adversely affects their credit rating. Payday loans are available to people with poor credit ratings because lenders are less rigid in their selection criteria and because they are easy to pay back on time (on payday) they can put a positive mark against the borrower's credit report, actually improving their credit rating overall.

To be eligible for a credit card a customer needs to be able to prove that they have a good enough credit score and have lived at a permanent residence for a certain amount of time, amongst other criteria but with a quick payday advance the eligibility criteria are much simpler. Payday loans are available to people who are 18 or over, earning at least £750 a month in a permanent job, as a permanent UK resident, with a confirmed address.

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