What Is Better – Getting Cash Today or Paying Late Fees Tomorrow
No body likes to pay late fees on their bills. Late fees are the added charges on monthly bills that businesses like to apply not only to be sure people pay on time, but to fill their pockets for doing nothing. There are all many reasons that people get charged late fees for, but one of the most common is that the person just didn’t have the money to pay it. However, there are things that people can do to pay their bills on time and limit the late fees, but is it better to pay the late fees or get cash advance loan?
The following information looks at both cash advance loans and late fees to give people details that will help them make the most out of their situation.
Cash Advance Payday Loans: These are short-term loans that are provided to people with no credit check, and the cash is deposited directly into their bank account usually on the same day.
How do cash advance loans work? People can get cash advance loans, sometimes referred to as payday loans, on the web or in person with nothing more than a bank account and ID. The loan is secured using a blank check or bank account number and borrower provides the details and grants access to the lender to the borrower’s bank account. This is how the lender guarantees that the loan will be paid back. On top of that, the lender charges a fee for the service. Unlike traditional loans, or long term loans, cash advance loans don’t charge any interest, but instead have a fee for the service they provide. The fee varies from state to state, and some states have already put caps on the amount the lender can charge for the service, but it’s good to check with the local laws before getting a cash advance. Most states have fees that vary between $15 – $25 per $100 borrowed. This means that if a person takes out a $100 cash advance loan, they would need to pay back $115. That’s it. A $15 dollar fee for the convenience of having $100 deposited directly in the bank for use usually on the same day. However, the full amount would need to be paid back by the next payday, or within 2 weeks, and thus the reason its called a short term loan. However, for a person that has to pay bills, and the bills charge late fees, paying a $15 fee instead of the late fees doesn’t sound so bad, or does it?
How do late fees work? Late fees are charged to people when the don’t pay their bills on time. Most companies will charge some sort of late fee, and the fees can vary between $10 to as much as $50. Most credit cards will charge between $25 – $40 and it doesn’t matter what the balance is of the account or the amount due on the bill. This means that even if the amount owed is only $20 and a person pays late, the credit card companies will still charge the same late fee, and in most cases will be more than the bill itself. In addition, if a person has two or three of these accounts due and doesn’t have the money to pay them, they will be charge several late fees that could total as much as $100 or more. In addition, they still need to pay their bill that is due, but is now due at more money. Plus, if a person is near their credit limit, and they don’t pay on time, the credit card company charges the late fee on top of their existing balance, and if the fee puts the account over the limit then the person will be charged an over the limit fee as well. This means that not paying a $20 bill on a credit card could result in a $40 late fee, plus a $40 over the limit fee, for a total of $100. Now, the next bill comes due and they have to pay the $100 plus the next month’s bill of $20, for a grand total of $120.
Looking at these two scenarios, the person who pays the late fees hasn’t gotten anything from the money they paid. They are paying $80 in fees, and $40 in balance payments, whereas with a cash advance they would get $100 upfront to do what they want. The person can pay their $20 bill, saving them $80, and still have $80 dollars in their pocket for some fun until the next payday.
Another big advantage between cash advances and late fees is the credit history. If a person doesn’t pay their bills on time it will give them negative credit marks, making it harder for them to get good financing in the future. Whereas, a payday loan doesn’t go on credit report and the person is able to pay their bills on time keeping their credit history in tact. Even if a person doesn’t pay back their payday loan on time, they will be charged additional fees, but it won’t effect their credit report or even show up on their credit history, versus a credit card late notice which does impacts a person’s credit score.
If people have to decide between getting a cash advance today or paying late fees tomorrow, the better choice would be to get the cash today and start paying bills. Credit history is not something to mess around with and not paying bills is the worst thing a person can do to their credit. In addition, the late fees charged are enough to put a person further into debt as they try to make their bills and keep up on the late fees.
Don’t wait till it’s too late, get cash today and pay the bills on time instead of paying late fees.
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Tags: cash advance, cash loans, Credit, Credit, credit problems, fast cash, late fees, payday loans, short term loans
