If you are in a lot of debt, a cash advance or payday loan can seem incredibly helpful. With a cash advance, you get cash almost immediately. These loans are easy to get approved for, and you can pay off the debt you need. However, be careful before getting one. These small, short term loans are useful if you are in a financial bind. But if there is no financial emergency, definitely think twice before getting a cash advance!
These loans can end up being very costly and giving you a lot more debt in the long run. In order to get a credit card cash advance, you may have to pay a fee (typically 3-5% of the cash amount). They then have ridiculously high interest rates, sometimes even amounting to a 365% APR. With this kind of interest rate, you can easily fall into a debt cycle if you do not pay it back on time. Plus, these loans are meant to be short term, so you must pay it back by your next pay check. If you do not, you will end up being charged high amounts of interest on the full amount of the loan you took out.
So, before you get a cash advance as a quick fix, think about your financial future. Is it a financial emergency? Will you be able to realistically pay it back by your next paycheck?
If the answer is no, steer clear of cash advances. There are many safer financial decisions to help with your debt.
