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This is actually a fairly common question from individuals who are facing tough times. Should I take a cash advance or a payday loan and, if so, what are the differences?

First off, let me be absolutely clear – neither one is a good choice. Payday Loans and Cash Advances are nearly one-in-the-same and, most importantly, they are attrocious. The interest rates and payment terms are abominable and are built for one purpose and one purpose alone – to drive you further in debt and enrich the provider of the loan.

So how can you avoid taking a cash advance or a payday loan? Look for alternatives.

  1. Find quick side work that pays cash, such as waiting tables or doing manual labor on nights or weekends such as mowing lawns. These types of jobs can net you decent cash fast, without forcing you to risk your credit even more.
  2. Talk specifically to your boss. If you have a legitimate issue, many companies can help you out without an interest penalty. For example, if you can get paid for overtime, try to work an extra week in overtime this month and then, a week early, request your month’s pay. This way, you have already earned the pay, and they will be less hesitant to go ahead and help you out.
  3. Sell something. Yes, sell your TV, your video game console, or whatever else you don’t need that isn’t important. To be honest, now is the time for you to cut back on the extras and focus on the long term. If you can do without for a while, you can get back on track to the good life.
  4. Go to your bank and see what they have available. Anything from your bank will be better than a Payday Lender.

Under no circumstances would I or any qualified financial assistant encourage you to get a loan of this type. It is just not a smart thing to do.

This Financial Services article was written by Russ Jones on 9/24/2008

Russ Jones is a financial services expert.