Small cash loans are handy, and may be critical to avoid late payments or to buy groceries, but for some, they are habit-forming. Indeed, Americans are credit-happy, which may account for the sharp rise in bankruptcies the last few years. In this country, 81 percent of households have at least one credit card, and the average household has between seven and 10 cards.

There are 1.2 billion credit and retail cards in circulation in North America. Each year, about 200 million credit cards are issued on this continent. Every year, all these figures rise dramatically, as do the numbers of individuals who rely on loans until payday.

Small Cash Loans and Credit Card APR

Both small cash loans and credit cards have an annual percentage rate (APR) that you pay in addition to the amount of the loan. The APR on cards is crucial to determining your monthly finance charge. Logically enough, the higher this rate, the higher the costs of using the card, and the higher the amount you will pay if you do not pay off your balance every month.

Credit card statements differ from those of small cash loans in that the APR on card statements is spelled out as the APR and either a Daily Periodic Rate or a Monthly Periodic Rate. These last two rates are important because in debt consolidation, these negotiated rates can be lowered. Quick cash payday loans are simpler and do not get into such areas as complex interest rates.