Many people, who are residents of the UK, are usually anxious during month end because of the credit card bill payment. If it is festive season then credit card bill can often be very high. People find it very difficult to pay the bill and during this time, most people consider Payday loan.
Payday loans are a kind of short-term loan, which has become a very popular option in the UK for people who are looking for short-term helping hand. However, the question is whether credit card option is better than payday loan?
The answer to this question will be credit cards are little different from payday loans, and in case you are interested to limit the risks, and then payday loan may be the right answer.
In order to get any kind of online cash loans like payday loans, you may prefer to seek loan from Loan Pig, where you can get lots of benefit as compared to any other lenders. You can though find many other lenders too offering such kind of online loans, but their terms and conditions may be quite tough for many.
What is the risk associated with credit card?
Let us try to understand what makes your credit card loan little riskier, where you may get into a debt trap easily. You must understand that interest will be added every month in your balance of credit card, if you fail to clear the payment.
This will mean that your balance outstanding will keep on increasing every month. While you are making payment, which is just minimum amount due then certain amount of your instalment will go simply towards paying off your interest amount that is added.
In essence, at the end of the day, you will be paying money, which will never reflect in your actual outstanding amount of credit balance.
Payday loans particularly in the UK usually have certain limits that will ensure that lender will never repay more than two times of your loaned amount. However, in case of credit cards, nowadays unfortunately, there is no bar prescribed for credit card cost.
This means that balance of your credit card will keep on accumulating interest and the cost of all kind of purchases will go up as time passes. In certain instances, this may keep on growing up to the point where your credit limit can also reach or even get exceeded. If you miss few payments then you will find that you are under serious debt.
Having gone through both the options i.e. credit card payment and availing payday loans, you will find that, in case you want to protect yourself from the potential very long-term financial problem of credit score, it is always better to go for payday loans. Payday loans are usually very quick to get approved and no-strings-attached. It can offer a helping hand when you are going through slightly tougher times during the end of the month or year.
That is the reason payday loans are becoming popular day by day in the UK.