Many people avoid using short-term loans for the fact that direct payday lenders charge high interest. The cost is a bit 'in your face' when an interest fee is attached to the initial payoff. Since this debt is supposed to be paid off in just a few weeks, the lenders must collect their revenue quickly. Because the loans have half the term limit as credit cards, it can become a very expensive debt if not paid off on time. Interest never goes unnoticed when it comes to short-term loans.
Credit cards will usually carry much lower rates with monthly terms and the revolving credit line will remain open as long as you are good at making the monthly payments on-time. Pay down your debt and have that much more available to spend. Give the creditor a reason to raise your rates and not only will the creditor jump on the opportunity, but the rates will skyrocket to short-term loan numbers or even higher. This means that even one late payment could change your debt drastically. Go from a 11.9% interest rate to a 29.99% rate on your current balance, your minimum balance will increase with the added interest charge. Responsible short-term loan lenders will at least keep the rates the same no matter what you do.
How comfortable do you get when your finances can no longer keep up with all the debt and unexpected or emergency costs? If you minimum credit card payments increase and the only way to get fast cash is by applying with payday loan direct lenders online, would you be able to continue making payments as well as payoff the short-term loan? Most often, at this point, comfort has flown out the window and financial stress have is the replacement. Will you be able to afford the payoff?
Honestly answer the above question in order to make the best choices for your finances. Compare your monthly take-home income and all monthly expenses. Don't forget to include any repeating quarterly or biyearly bills. In fact, take a look at the most expensive month in the last year. Use the worst case scenario to plan your monthly budget. If you plan for the worst, the rest of the months will be smooth sailing. You may even find that doing so will alleviate the need for future direct payday loans. While you are at it, you can focus on paying off some that debt you were once so comfortable with.
Credit card companies want you to be comfortable with their debt. It is their strategic way of keeping you on board while carrying balances from month to month. Because their interest does not usually have the same shock value as a short-term loan, people feel good that they are making smart financial choices. It isn't until the debt becomes uncomfortable that many people begin to calculate how much of their income was wasted every month.
Change your financial mindset. Treat credit cards as you would direct payday lenders, pay the debt off as fast as possible and become comfortable with putting money in a savings account for emergencies.
Spotya! Payday Loans does not advocate using a payday loan for just any type of spending. Our loans are meant to be short-term being paid off with the borrower's next paycheck. Visit http://www.spotya.com for more information on payday loans.