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Payday Loans
You see them in every strip mall east and west of the Mississippi: Cash Advance, Cash-N-Go, Check Into Cash, Urgent Money Service, and the list continues. What exactly are these businesses that seem to offer you money right when you need them? They are cash advance companies which often make loans commonly called payday loans. In many ways, these companies have become the country’s modern day loan sharks. No, they will not cut off your thumbs or pour cement around your feet and make you swim with the fishes. They will, however, torture you with fees, upon fees, upon fees.
So what is a payday loan? A payday loan is a cash advance loan. The loan in itself is held by a personal check. For example, you could write a personal check for $135 in order to borrow $100. The check casher will agree to not cash the check often for fourteen days. This can be extended if needed, but not without a charge. Many people use it to bridge the gap between pay checks. But the Federal Trade Commission calls it “Costly cash”, and for good reason.
Using the example above of a $100 loan for a check of $135, you will see when the math is done how truly costly a Payday Loan is. When you are in desperate need, the $35 seems miniscule. But, when you consider that this charge will occur every fourteen days if you do not pay, this equates to 650 percent APR. A bad credit card will offer you 28 percent APR. When you choose this option, you are going to pay much more in charges and interest and could find yourself even deeper in debt.
So what are your alternatives? If you seriously cannot make it until next payday, there are other options you may have instead of taking out a payday loan. Sort your bills. Choose which ones can wait until next pay day and make them wait. If you have creditors, you can negotiate a new or temporary payment plan to see you through.
Finding Good 0 APR Credit Card Offers
While most of us wish that we could find credit cards that only had 0% APR, they cant really exist because the credit card companies wouldnt make any money. However, if youre looking to save money with a lower interest rate, there are ways to find great deals on APR percentages.
Balance transfers
The trick with getting a 0% APR is to find a credit card that allows you to transfer other balances under that initial lower APR interest rate. While there is usually a time limit to these kinds of offers, they can help save you a lot of money in the long run. And if you think about it, these offers are much like getting the 0% APR on that other card, its just a matter of where you send the bill to.
Talking with the cards that you have
You might not know this, but if youre a good customer for your current credit card company, you may be able to ask for a limited 0% APR period as well. If youve been paying your bills on time and keeping a fairly low balance, many companies are willing to reduce or negate the interest rate for a while. They want your business, so theyre usually willing to give you a deal to keep you using their card.
Going online
There are many credit card company comparison sites that will allow you to see which card companies are offering 0% APR for the first year of use or for limited time periods. And while this isnt a permanent solution, you can see which cards are willing to take you on as a customer for a lower interest rate.
A word of caution
While its safe to say that youre aware of the fact that 0% APR periods can be short, you need to be certain that you understand what the card company defines as a period. In most cases, the first purchase starts the cycle of interest free credit balances, as opposed to the first billing cycle end.
Look to see what the interest rate will be when the trial period is over. If the interest jumps dramatically, you might be in for an unpleasant surprise if youre still carrying a balance. And the truth is that many of these credit card companies will increase their interest rates from 0% to 15% and even 24%.
Also realize that there might be restrictions in getting the 0% APR. If you make certain purchases or dont make a payment within a certain time, you might revoke your right to that lowered interest rate. Read the fine print.