Payday loans are at an all-time high because of the economic crisis that has hit the world. Cheap credit is no longer an option for many people, which is why payday loans are becoming so popular. Nonetheless, there are alternative options to payday loans. Credit card debt is certainly not a positive thing, but it might not be so bad when compared to payday loans. Here is a short rundown of why credit card debt may be a better alternative for you than getting further into payday loan debt.
Annualized Percentage Rate for Payday Loan Debt
The average annualized percentage rate (APR) for payday loan debt is upwards of 390-780%. When you need money to feed your family, this doesn’t really matter. Understandably, you would want to spend the extra money to feed and clothe your family.
Nonetheless, the APR rate for credit cards is far lower. On average, credit card companies charge 7-26% due to many legal restrictions. The difference between credit cards and payday loan debt is immense. There may be limits on credit cards, but that is certainly a better option than payday loan debt.
Default Rates with Payday Loan Debt
The difference in default rates between payday loans and credit cards is also large. If you cannot pay dues because you are late paying another creditor, then the universal default APR range applies to credit cards. That means that they cannot charge more than a specific percentage if you are late.
However, if you have not yet consolidated payday loans, you are not subject to these default rates. You could be forced to pay hundreds of percentage points in interest still.
Other Problems if you Don’t Consolidate Payday Loans
If you do not consolidate payday loans, many other problems are far worse than credit cards. With credit cards help, there is a way to improve your credit by paying off your loans. No such thing exists with payday loans. Your credit rating will be unaffected even if you work diligently to get payday loan debt help.
Choose What is Best for You
Some people don’t want to deal with the hassles and legalities that come with credit cards. If you prefer to get a
a smaller amount of money from a local payday loan lender, that is your prerogative. Nonetheless, you should be aware that your life could be made a lot more difficult because it is under-regulated.
If you already need payday loan debt help, please let us know to help you extricate yourself from the situation as soon as possible. We will walk you through our steps to get you out of debt. When you are debt-free, however, make sure that you do not fall into the same traps. Use credit cards rather than payday loans if you absolutely have to incur debt to feed your family. We’re here to help you!
