Avoiding Payday Loans and Cash Advances

If quick and easy cash sounds too good to be true, it probably is

It seems like a reasonable idea. You’re a little short on cash and you can’t quite cover your bills. Why not borrow just a little cash from a payday loan company? It’s quick, easy, and doesn’t even require a credit check. It’s a tide-over solution for a small problem.

Well, a small problem can quickly grow into a big problem when you’re dealing with payday loans, and soon might find yourself with layer upon layer of high-interest payday loans. Your tide-over solution may quickly sink you, and feel like there’s no way to keep you from drowning.

Let us throw you a life saver. At Consolidated Credit, we believe in real debt solutions for real debt problems. We’ll tell you more about it in the section below, or you can speak with one of our trained credit counsellors. They can give you the facts about payday loans and help you with any other questions you might have. Call to speak with someone today.

What’s wrong with a payday loan?

Payday loans (or short-term installment loans) require you to pay back the full balance in a short period, usually within two weeks or until the date of your next paycheque.

Fall behind, and the trouble begins.

Financing charges can be as high as $30 for every $100 that is borrowed, and that can add up to an amount equal to 600% APR if you carry the debt beyond the first payment. At those rates, a lot of people fall into a spiral, extending loans or taking out new ones just to cover the interest.

Before you take out a payday loan, look into other options for debt relief and talk to a credit counsellor to find a more stable route out of your financial difficulties.

What about credit card cash advances?

A payday loan might be the king of risky-and-quick cash solutions, but withdrawing cash advances from your credit card is not far behind. Keep the following things in mind, the next time you plan to take out money on your card:

  1. Take a look at your bill. The interest rate applied to a cash advance is almost always higher than standard card transactions.
  2. Look at the bigger picture. Your money is coming at a high price. If you don’t pay off the balance in the first pay period, you will have to pay interest on your advance.
  3. Watch the balance. Withdrawing money from your credit card will have a direct impact on your debt load, and carrying too much will affect your credit score.

In almost every case, these kinds of quick-fix cash options are only band-aid solutions that may help you tread water but never get ahead. If you have a real problem, you need a real solution. Call Consolidated Credit at for free advice from a trained credit counsellor.