Credit cash advance vs payday loans

Short term loans like payday loans and credit cash advance are great for when there is a financial emergency. You may find yourself having to decide between credit card cash advance and payday loans when you are in a financial emergency. The more information you know about each loan the better decision you will make.

Payday loans and credit cash advances have one thing in common, you can get them real fat – he following are the main differences between credit cash advance and payday loans.

How much are you allowed to borrow?

Typically, payday loan lenders can give you as low as 100 dollars but the maximum loan amount is limited depending on the state or country. For the credit cash advance, you get a percentage of your credit limit.

Payday loans have the ability to trap consumers into heavy debts. This has state governments stepping in to protect borrowers from lenders. The lower limit can range from 100 dollars to 1000 dollars. Credit card lenders have imposed weekly, daily or monthly limits depending on several factors.

The repayment terms

Credit cash advance loan, unlike the basic credit card purchases, starts earning interest immediately the loan gets approval. You do not get an interest grace period like you do when you go for normal credit card purchases. Payday loans also come with similar conditions.

 You get immediate interest as soon as the loan is approved and deposited into your account. Payday loan lenders require payment as soon as your next payday but with cash advance you can carry it long term if you need to. 

The interest rates

when it is time to pay out a cash advance, you will need to pay 5-15% more of the amount you received. The interest on the credit cash advance is about 24$ APR. payday loan lenders charge an upfront fee based on the amount of money you borrow. The interest rate is 15-30 percent of every 100 dollars you borrow.  The repayment period of a payday loan is 2 weeks to a month, making the APR about 400%.

When it comes to interest rates, there is a distinctive difference between the two. You could take a cash advance and pay it back with very little interest rates but the payday loans will still be expensive.

what are the requirements

payday loans are easy to get. All you need to qualify for a payday loan are a national id or social security, working bank account for wire transfer and to be over the age of 18. Cash advances are a little bit stricter than payday loans; you need to be approved for a credit card that allows for ash advance.  There are fewer requirements to get a payday loan.

Final word

Before you take out the loan, keep in mind that both cash advance and payday loans is that they both have drawbacks and can cost you much more in the end. Both loans can be expensive when you are living on your paycheck, only take out the loan when you have financial emergency otherwise just do not risk it.