Carried away with credit cards
I used credit cards
Online payday loans and traditional personal loans are two very different types of credit. It’s important to know how to use each one so you don’t end up with overwhelming debt later.
I remember when I first started college. I was a great example of how NOT to handle your money. I used credit cards as though there would be no consequences. It’s almost a decade later now, and boy am I paying for it.
Careless spending on non-essentials
I had heard it all – that credit cards were dangerous, that I’d regret it later – but I thought I knew better. I thought buying clothes and going out to dinner with my friends was worth the interest I would pay later. The lesson there is that you should never buy things you don’t need with money you don’t have. I am still paying for my college purchases to the tune of more than $200 a month. I don’t remember those dinners with friends and the clothes don’t fit me anymore, but still I am paying for them.
Help with the necessities
Not everything I put on my credit cards was unnecessary. There were times when I really needed to be bailed out. My car broke down about every other month. I got my first apartment and needed dishes and cookware and a microwave. One after another, each item went onto the credit card. My monthly minimum balance climbed so gradually I barely noticed. It would be years before I noticed that the difference between my monthly payments and my monthly interest was pretty negligible.
Knowing what I know now
If I had it all to do over again, I’d definitely go about things differently. I hadn’t even heard of online payday loans back then. I knew about personal loans, and I also knew those weren’t really appropriate for my expenses, which were generally only a few hundred dollars. If I would have cut out the spending on non-essentials and used online payday loans responsibly, for my emergencies, I’d have an extra $200 a month today.
Using online payday loans responsibly
Online payday loans are good option for financial emergencies because they are easy and fast. If I would have taken out a $300 payday loan when my car broke down and paid back that payday loan on time, I wouldn’t still be paying for repairs on a car I don’t even have anymore.
Online payday loans are easier than applying for a credit card because you can do the whole thing online with no faxing or mailing. I could have had my money in time to get my car when it was fixed because it only takes a couple of hours for the money to be deposited directly into a bank account. Even though I didn’t have any credit history, I would have likely qualified for a payday loan through Personal Money Store because there are no credit checks.
Traditional personal loans
Personal loans are good for larger expenses. They are tougher to get because they are issued based on your credit history. There is a lot of paperwork and traditional loans usually must be negotiated in person. Long-term personal loans are good for buying cars, houses, furniture and other purchases that cost several thousand dollars. There is a world of difference between online payday loans and long-term personal loans, so make sure you use each one the right way.
Hey, using a payday loan service will beat using a credit card on short term expenses any old day of the week. The best thing, and trust me, I know this through bitter experience as well, to use credit cards for are to buy a few small things here and there (a tank of gas, a night on the town) SPARINGLY, and pay it off really quickly so you build your credit rating. A payday loan instead of those darn things will save so much hassle, it isn’t really funny at all.