By John Campbell

In the world of cash advance bigger isn’t better.

As a general rule of thumb, you should never get more money out of a cash advance than you absolutely need. The extra interest and other fees you’ll end up spending on the advance just aren’t worth it.

Let’s say you need $200 to pay for some badly needed new tires. You’ll be getting roughly $438 on your next payday, which is three days away. You only have $25 to last until then, but you need the tires now, so you apply for a cash advance online.

When you’re applying for the advance you’re approved for $400 and opt to get the extra money since you could use the money to pay for some groceries. Big mistake.

If the lender charges $15 for every $100 you borrow you’ll wind up owing $60 in fees, double what you would have owed if you had just taken out $200. Whether or not you manage your money poorly, $230 will be a lot easier on your finances than $460. The more money you owe, the easier it is to fall into the debt trap of rolling over your loan, which could easily drain your finances.

With traditional loans or credit cards, the annual percentage rate (APR) is often no higher than 20 percent and could even dip into the single digits. An extra $200 won’t cost you an arm and a leg in interest with these forms of credit. With cash advances, APRs typically cost anywhere from 300 to 900 percent, which is the equivalent of owing both arms and legs.

Before you ever apply for a cash advance you should have a very good idea of how much money you really need. If you get more than you need you’ll probably regret it.

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John Campbell is the writer and editor of CashBuzz, A financial portal for the rest of us. Check out cashbuzz.com for the latest articles on money management and tips and tricks that can help improve your finances. This article may be reprinted on your Web site if the copyright, author information and active link are included.