 Cash
Advances - How to Manage Them Effectively
Many articles on this site address the various types of cash advances
available out there for public consumption, but so far the topic of
managing multiple cash advances has been absent from the conversation.
This article discusses what to do if you ever find yourself juggling
more than one cash advance and how to
get back in the black should a circumstance such as this ever arise.
Examine Your Current Financial Situation
Believe it or not, many people get caught up in the smaller details
and forget to look at the big picture. The circumstances surrounding
your need for a payday cash advance
may have been unanticipated or even accidental, but getting out of debt
will be anything but a coincidence.
Cash advances carry with them high interest rates that discourage consumers
from "rolling over" or extending the balance beyond the due
date. Because cash advances are designed to be short-term in nature
(see the article on short-term
cash advances) keeping them for any period longer than that for
which they were intended can be a big mistake. For the purpose of this
article, assume that you have multiple cash advances from more than
one company, and that these cash advances are more costly to hold on
to than, say, a credit card you haven't made a payment on (this will
often be the case).
Which Cash Advance Do I Tackle First?
Since the smartest thing to do would be to get rid of these cash advances
because they cost more than any of your other debts, the next step would
be to figure out which one costs the most in the event you can't pay
them all off at once. Finding this out should be relatively easy; simply
examine your cash advance loan
agreement or send an email / place a call to your cash
advance lender. Most cash advance providers don't necessarily deal
in APR (annual percentage rates) but instead a fee per $100 borrowed,
so this makes it a lot easier to compare apples to apples when figuring
out which cash advance should go first. Obviously, you're going to want
to pay the higher fee cash advance right away and save the cheap
cash advance for later payment; this will ensure that you're paying
down your debt as quickly as possible with the least amount of cost
to your wallet.
Things To Watch Out For
When employing this strategy, remember that you've agreed to a number
of terms such as repayment dates, automatic withdrawal schedules, and
possibly even an assortment of late fees or fines. Use the following
checklist to ensure that you're doing all that you can to reduce the
number of excess charges:
- If you're paying the amount loaned at a date later than what was
previously agreed upon, make sure your same
day cash advance provider knows about it. Generally, you will
have left your banking information with the loan issuer and they will
be scheduled to withdraw funds from your accounts on the date you've
agreed upon. If the funds are not available, being proactive and letting
them know about it will save you the NSF (non-sufficient funds) charge
if they try to initiate a repayment and the cash isn't there.
- Be careful not to take out more than one cash advance during a single
period. This is especially important since tracking systems are being
developed to monitor how many cash advances are issued to any one
person at a time. Having more than one cash
advance out is a sign to many providers that you won't have the
money to repay them now or in the future, so you may be inadvertently
reducing your chances of future borrowing if you take out too many
cash advances at once or you take them out too frequently.
- If an emergency arises and you need to borrow a significant sum
of cash for an extended period of time, you might want to consider
other financing options. Cash advances are not designed as long-term
solutions, and the fees associated with them prove it. Alternatives
include collateralized loans against your home or vehicle, or even
short-term, unsecured loans if you have an established history with
your bank or credit union.
- If debt seems to be a recurring problem for you or someone you know,
there is help available. Frequent cash advance use might be an indication
of impending financial disaster, so get assistance before it's too
late. The National Foundation for Credit
Counseling is an excellent resource for people who are trying
to turn their life around and get out of debt.
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