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Loans Vs. Credit Cards In Brief

by Jim ONeil on February 25, 2012

in personal loans

Several years after the recession, many British consumers are still experiencing financial problems. Credit cards and loans are two basic types of financing but credit card use has declined significantly during the past year, according to a study by PricewaterhouseCoopers.

Payday loans have become popular alternatives because they are easy to get and are funded quickly.

These no credit check loans are perfect for short-term use, easily covering unexpected utility expenses, car repairs, and even medical bills. Whether they are suitable for long-term money management requires a different perspective. Some experts advise against the regular use of loans but this financing can sometimes put families on more solid financial ground.

The consensus regarding credit cards is that they encourage people to spend money they do not have. As a result, many cardholders amass huge debts and must make regular repayments that include expensive interest charges. A loan is one-time financing, which makes it difficult to repeatedly overspend, and it features a simplified repayment schedule.

Some no credit check loans feature longer repayment periods than a few weeks or a month. This lowers the monthly payment amount and the loans APR is sometimes cheaper than credit card interest rates, decreasing the overall amount to be repaid.

Based on these features, payday loans can be suitable for longer-term financial needs.

Many factors have led to the personal financial crisis that many Brits are experiencing. Expenses are rising because general prices have increased. At the same time, wages are stagnating, with 15 percent of workers not receiving a pay raise within the past three years.

As consumers struggle to stretch their paychecks further, loans can help fill the financial gap. This financing is available to meet short, medium, and long-term needs and many consumers are now using loans instead of their credit cards.

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