Difference between Credit Card Cash Advance and Payday Cash Advance Loans

Difference between Credit Card Cash Advance and Payday Cash Advance Loans

It is surprising to note that most people feel credit card cash advance loans and payday cash advance loans are one and the same thing. The truth however is that they are two different kinds of loans with unique characteristics. They should not be mistaken for one another as it may lead you to financial stress by misusing these loans.

To understand the difference, let us first look at credit card cash advance loans. As the name suggests, this type of cash advance loan is processed by your credit card company. To apply for cash advance loan with your credit card company, first you will obviously have to either own a credit card or apply for one. Qualifying for a credit card can be quite tough nowadays with the strict norms in place. In fact those with poor credit scores are less likely to be approved for a credit card let alone cash advance loan. Your credit card company will most definitely look into your past credit history; try to assess your credit worthiness or your ability to repay any kind of loan. If you are approved, the amount of cash advance loan you can qualify for will be either as much as your total credit limit in your credit card, or a certain percentage of it.

As far as payday cash advance loans are concerned, these have nothing to do with your credit card company. They are processed by payday loan lenders and are much easier to obtain. Payday loan lenders are not concerned about your past credit history. That is the reason why payday loans are recommended for those with a bad credit score. The only real qualifying factor for the payday cash advance loan is your current job and your current income. As long as you have a job, you can qualify for a payday loan. The maximum loan amount would depend upon your next paycheck. Payday cash advance loans can be obtained within 24 to 48 hours and are usually due when you get your next paycheck.

The main difference between credit card and payday cash advance loans is firstly the type of lender, the ease with which you can obtain these loans with payday loans being the easier one and the fact that those individuals with a poor credit score can still apply for payday cash advance loans. Also payday loans are in general known for being more manageable considering the new regulations in place in most provinces in Canada.

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