Credit Cards vs. Payday Loans: How To Pay Off Your Debt

PayDayLoans vs Credit CardsIf you’ve accumulated a substantial amount of debt, you’re not alone. Millions of people struggle with the same issue at some point in their lives. The question is how you’re going to go about eliminating it.

When paying it in one fell swoop isn’t an option – and it rarely is – it pays to come up with a strategy so you can take a measured approach to the situation.

One popular option is to consolidate several kinds of debt by moving it over to a single credit card. However, payday loans may be a more practical way to go.

The Trouble with Using Credit Cards to Pay Off Debt

Medical bills and other types of debt can’t be ignored. As a result, you may be tempted to pay them with a credit card. There are several potential issues with this strategy.

Most notably, credit cards are a type of revolving debt, which means that the balance is carried on from one month to the next, and interest charges are applied every month too.

Even if you intend to pay off the card as quickly as possible, things happen. You can easily end up carrying that credit card debt for a long time, and you’ll pay dearly for it as long as you do.

What About Payday Loans?

There are lots of horror stories out there about payday loans, but the truth is that they can be enormously beneficial when used correctly. For instance, if the due date on a major bill is approaching and you don’t have the necessary funds, you can use a payday loan as a stopgap measure until the next time you are paid.

When your next pay cheque arrives, the loan will automatically be paid back. Unlike credit cards, then, you won’t end up carrying this new debt for potentially long periods of time.

Online payday loans are also great for paying off debt because they are convenient and straightforward. You don’t have to wait for a new credit card to arrive, and approvals are typically made in seconds.

That brings us to another point: If you owe a lot of debt, your credit may not be in very good shape. It may be impossible for you to qualify for a credit card at all.

Fortunately, your credit rating isn’t taken into account when you apply for this type of loan, so this is a terrific option for people who want to manage their debt without the use of credit cards.

Using Payday Loans to Pay Off Debt

In many cases, it’s possible to carry over a payday loan from one payday to the next. You just have to pay the interest on the loan to keep it active. For cash-strapped people, this is a very attractive and effective option.

It is certainly better than defaulting on a loan or other form of debt and having to deal with debt collectors. Before charging debt to a credit card, always consider online payday loans first.