Payday loan providers seem to promise an easy solution to unexpected car repairs, unpaid credit card debt, and other financial emergencies. Many credit card companies also offer cash advances, which are essentially short-term loans that can seem attractive when you’re low on funds. Unfortunately, payday loans and cash advances can make your financial problems even worse, leaving you unable to pay your basic expenses without piling on more credit card debt. Here’s why you should avoid these offers.

3 Reasons to Avoid Payday Loans & Cash Advances

1. Extremely High Interest Rates

Most credit card companies charge extremely high interest rates for cash advances, sometimes up to 30% or more. This can make paying down your credit card debt extremely difficult, especially if you’re already struggling to pay your bills. The interest rates for payday loans are even worse, with many companies charging over 400% annual percentage rate (APR).

2. Ever-Increasing Fees

Payday loans usually have extremely short terms—typically as little as two weeks. If you’re unable to pay back the loan out of your next check, you’ll have to pay a fee to extend the term and keep the account from going to collections. Over time, the fees and interest you pay could be several times the amount you originally borrowed, especially if you have to continuously extend the loan.

3. Immediate Accrual of Interest

With most loans and credit card debt, you’re only charged interest if you don’t pay it off within a certain period. However, with both payday loans and credit card cash advances, interest starts accruing immediately. Even if you pay off the debt the next day, you’ll still lose money in the long run.

If you’re struggling under the weight of unmanageable credit card debt or medical bills you can’t pay, Padgett & Robertson, Attorneys at Law, will help you regain control of your life. They’ve been serving borrowers throughout southern Alabama for over 40 years and always take the time to deliver solutions tailored to each client’s individual needs. Visit their website for more on their bankruptcy and debt relief services, get more financial tips on Twitter, and call (251) 342-0264 to make an appointment with an accomplished attorney.

No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.