The Debt Cycle
Is debt a cruel master? You bet it is. The cruelty of debt is a reality when each month it feeds off finance and interest charges, and in the end, the poor borrower has little to show for the loan. Monthly minimum payments barely cover the interest charges. Upon the end of the month, the balance looks pretty much the same as the debt cycle continues. Households continue to struggle, and they rely on credit cards and online payday loans as their primary means of support.
People using the third-party money to support their budget requirements don’t have much to show for their debt. It’s a fact of life that whatever item was purchased, it is well past its use-by-date by the time it has been paid off. Bills continue to come in even after you have paid for groceries, a family outing, or even shoes for the kids. Larger purchases like electronic goods and furniture are still hanging around the house although at a lower value. If you calculate, paying off an item usually means you have paid almost twice the original purchase cost. Minimum payments are payoffs at a snail’s pace. That’s a relevant example of budget cruelty.
The option available to borrowers who desperately need money is to apply for an online payday loan. Their popularity as a cash resource has currently grown exponentially. It is easy to apply for. Credit scores are irrelevant, and lenders can have the money for the customer in a flash. It’s a great solution when a person is confronted by a due date and does not have the funds available. Using these types of loans to keep up to date with regular budgetary demands makes life easier. But payday loans require a fast payback, unlike credit card repayments. In this sense, a borrower needs to find a responsible payday loan lender who charges only the additional financing costs.
The alternative may be a lender who charges higher interest rates and extra administration costs and increases both if the debt is not timely paid. Reading all the terms and conditions that apply to a payday loan is very important and will help to avoid trouble and confusion.
Does paying off a short-term loan create more money problems? It would certainly be cost effective if you used cash to pay a bill on time. That can be classified as damage control. If you use a payday advance for a desire, rather than a need, it might be difficult to see the value of doing that. It might be better to sell off the unused personal property or have a garage sale, or even work a second job rather than to improve your lifestyle. A positive result from that is not having to pay back a loan.
Utility Payment Options
The reality is that using a payday loan should be your last resort. If you can’t afford to pay your utilities, then you probably can’t afford to pay the interest rates as well. Utility companies also have some special repayment programs for low-income earners. It’s always worth looking into that alternative. If you qualify for that, then you should use any available opportunity. It makes sense to set up a budget and look at the areas in which you struggle. You should focus your lifestyle on your money management taking into account your income and your budget.
Stay Out of Debt
Cutting debt is not an easy road. It’s always been easier to pay with a credit card than to save the cash you need to buy what you want. If managing money was easy, half the American households would be living without debt. The nation’s debt crisis would not exist. Don’t depend on your ability to borrow as a way to exist. All debt is bad debt. Don’t let the cruelty of debt stand in your way of financial freedom and opportunity.