Cash Advance ? How Does It Work?

If you want a cash advance or a payday/paycheck loan, you usually get a personal check. Some companies use your bank account or credit card in addition to or instead of a check. This means that you have to write a check that is to be cashed or you have to agree to have an amount withdrawn from your bank account at a certain date in future (usually 14 days). After filling-in the agreement or contract you get a sum of money that is less than what you have agreed to pay. The sum is smaller because the difference is the "fee" for the loan service. Why would the company loan you money like this? Because loaning out money in this way and getting these "fees" really brings them a huge profit at your expense.

If we assume that you borrow $200 and the "fee" is of $15 for each $100, within 14 days you will have to give back $230 for the $200 that you borrowed. If by borrowing the $200 you avoid paying a $100 late fee or penalty on something, then it is worth the effort. But if you just need the money for yourself, the price is too high.

Simple math shows you that you are paying 15% interest for a 14-day loan. That means 3785 dollars compounded interest per year. So now you can understand why lenders are so very happy to give you the money. If they loan you $100 and you pay them back $15 more in only two weeks and they loan out the $100 again along with the $15 they got from you, by doing this for one year, they will turn their $100 into $3785. This is the proof you needed that it's better to lend them your money than to borrow from them.

Dominic is the author of this article. This article may be reproduced on websites subject to credit being given to the author, and a link to this website. If you would like more information go to http://www.cash-advanced.com

---

Why Does Your Credit Card Rate Keep Going Up?

Have your read your credit card contract through completely? Do... Read More

Consumer Credit Reports

A consumer credit report is a factual record of an... Read More

Credit Reports: Find out why you have been refused Credit.

You may already have 2 or more credit cards in... Read More

Credit Cards, Merchant Accounts, and Your Bottomline

Q: I'm opening a gift shop and want to be... Read More

5 Ways To Raise Credit Score

It's not as hard as you think to raise credit... Read More

Good Credit -- Essential for the Prospective Home Buyer

Credit is a funny thing. It can be a useful... Read More

Bankruptcy vs. Credit Counseling: What Should I Do?

Credit Counseling and bankruptcy are both ways to relieve the... Read More

Convenience Can Be Costly

You've just opened your credit card bill and attached to... Read More

Why Credit Cards are a Bad Idea

Credit cards are just so convenient, aren't they? There's no... Read More

5 Surefire Ways To Eliminate Credit Card Debt

Do you have enormous credit card debt? You are certainly... Read More

Learning the Disturbing Facts about Credit Card Debt

When I received my first credit card in the mail... Read More

Student Credit Cards 101

If you're a college student, you probably already have a... Read More

Credit Card Incentives

Credit card companies want your business. After all, lending money... Read More

Commercial Collections And Credit Granting

It is estimated that billions of dollars in delinquent commercial... Read More

Credit Repair Services vs. Do-It-Yourself Credit Repair

Millions of Americans suffer because of bad credit these days,... Read More

Teaching Students To Keep Out Of Credit Card Debt - The Parents Role

Parents have the full responsibility for their children and their... Read More

Choosing a Credit Counseling Company

If you have considered credit counseling as an option to... Read More

Credit and Loan Help for Mortgage Loans

Mortgage loans are some of the most difficult loans to... Read More

Building Good Business Credit After Bad Credit

Can you establish good business credit if you have bad... Read More

Free Credit Reports: From The 3 Major Credit Bureaus!

Get your credit report online for FREE. Many financial advisors... Read More

How To Avoid Becoming A Victim of Identity Theft

With identity theft statistics currently at an all time high,... Read More

Credit Card Balance Transfers Can Help You Stop Putting Money Down The Drain

As you probably know, interest rates are at all time... Read More

Bad Credit Loans For Those Who Seek Alternatives for New or Old Car

You can still save money on a Bad Credit Loan... Read More

All Is Fair In Love, War, and, Your Credit Report - At Least It Should Be! Understanding the FCRA

Fact: Over 150 million Americans have credit report with the... Read More

Credit Card Balance Transfers Explained

What is a balance transfer ? A balance transfer can... Read More

Fixing A Credit Report

Fixing a credit report starts with seeing what's on it.... Read More

Your Credit Rating and How To Check It

There is a lot of confusion surrounding UK credit ratings,... Read More

Credit Report ? How to Improve Your Credit Score

One of the great mysteries of life is how the... Read More

Credit Score ? for Scoring the Right Loan

Somebody once said, "There is always a way of knowing... Read More

19,178 Identity Theft Victims Per Day - Are You One Of Them?

Identity theft statistics are shocking. And we are told that... Read More

Credit cards

If gold medals were awarded for marketing consistency, the credit... Read More

Avoiding Credit Card Traps

The next time you open your credit card statement, take... Read More

Why Americans Find Predatory Lending Offensive

"Menis - the author translates as "indignant rage" - It... Read More