Credit Cards vs Payday Loans

Credir cards compared with payday loans

When you have bad credit, your loan options become limited to just a few.

Two of the most common financial solutions you can get are bad credit cards and payday loans. You might ask, which one between these two is better?

The answer to the question actually is that no loan is better than the other. Both offer great solutions for certain situations, depending on how much you need and your financial situation.

Payday Loans

Payday loans for people with bad credit are short-term loans that are paid off within one month. These loans generally offer small amounts from $100 up to $1500 and are released within 24 hours. With these features, payday loans offer great solutions for financial emergencies that occur in between paydays. Payday loans are an ideal option if you are looking for a fast cash loan that you also want to pay right away.

The one thing that you must remember about these loans is that, as bad credit loans, they are generally more expensive than regular bank loans.

Credit Cards

Like payday loans, bad credit cards are fast loans and can offer fast financial relief during emergencies. Credit cards usually don’t charge interest on any purchase you make using the card as long as you pay it off within the “grace period” that’s usually within 30 days. Any purchases not paid within that grace period will be subject to higher interest rates of more than 24% APR (Annual Percentage Rate).

While the APR or interest rate for bad credit cards is higher, this alternative offers more flexible terms. Unlike payday loans, bad credit card debts can be paid in 6 months to a year or longer.

So which one should you choose to solve your financial dilemma? Your decision should depend on which loan type best fits your needs and capacity to pay.