We've launched a brand new mobile app! Download it now. App Store Google Play

118118Money.com

Looking for a payday loan alternative?

118118Money.com
  • You could consider a credit card instead
  • Guaranteed credit limit
  • Check your eligibility with no impact to your credit score
Check my eligibility This won't affect your credit score

Representative example: Amount of credit £1,200. Interest rate: 34.0% pa (variable) Representative 34.0% APR (variable)

What is a payday loan?

Payday loans are designed to be taken out over a very short period of time and are usually relatively small loans which need to be repaid within weeks or months rather than years. A payday loan amount can differ between lenders but typically varies between £100 - £1000 over 1 -12 months and are usually over 100% APR.

Unexpected emergencies might come up, where you find you need money at short notice. For example:

  • A problem with your car that you need to get fixed in order to get to work or get your family from A to B.
  • Your boiler has broken and you’ll be without hot water or heating if you don’t replace it.

Due to the short term nature of payday loans, these can be appealing. Although all payday loan lenders are regulated by the Financial Conduct Authority (FCA), they have been under intense scrutiny due to these types of loans having a very high interest rate. 

118 118 Money is not a payday loan lender, but if you are looking for an alternative to payday loans, then you could consider one of our credit cards instead.

Apply for a credit card from 118 118 Money with confidence
Use our eligibility check to find out what credit limit we’ll offer you before you apply, without affecting your credit rating!
Check my eligibility This won't affect your credit score
118118Money.com
Why use a credit card from 118 118 Money as an alternative to a payday loan?

If you’re looking for an alternative to a high interest payday loan, a credit card from 118 118 Money could provide the answer:

Get a credit limit of up to £2,000.

Repay what you borrow in full or in instalments to suit you, as long as you make your minimum repayments. If you can, you should always pay off more than the minimum repayment.

Interest-free period on cash and purchases of up to 51 days when you pay your full balance each month.

Fee free – we do not charge any fees, however, third party vendors may have their own charges. An example of this is an ATM where a usage fee could apply.

You can check your eligibility with no impact to your credit score.

118118Money.com

Want to apply for a credit card?

  • Alternative to a payday loan
  • No fees*
  • Check your eligibility with no impact on your credit score
Check my eligibility *We do not charge any fees. However, third party vendors may have their own charges. An example of this is an ATM where a usage fee could apply.

Can a credit card be a payday loan alternative?

This depends on the type of credit card and the interest rate. Generally, credit cards come with a lower rate of interest in comparison to a payday loan. Your eligibility for a credit card will be influenced by your credit rating. If you have bad credit, you may find yourself ineligible for a credit card from many credit card providers. Though many providers offer an eligibility check which provides an indicator if you’ll be accepted or not without affecting your credit rating. So, on the basis of a potentially lower APR, a credit card can be an alternative.

A credit card from 118 118 Money may be a better option to fit your short-term cash flow needs than borrowing from payday lenders. If you take out a credit card with us and repay your full balance within 51 days, by the payment due date, it will be interest-free. If on the other hand, you do need to stretch your payments beyond 51 days, you’ll pay the interest rate set on your credit card. It should be noted that if you decide not to pay off your balance in full within 51 days, and you want to repay over a few months or more, you will still need to make the minimum repayment due by the payment due date, every month.

If you do take a credit card, the APR on our credit card is lower than that on traditional payday loans. You’ll also benefit from the fact that there are no hidden fees or charges with a credit card from 118 118 Money; but you should be aware that third party vendors may have their own charges such as cash machine charges which charge you to use them.

Remember, 118 118 Money are not a payday loan company.

Don’t just take our word for it. If you’re interested in an alternative to a payday loan, our Trustpilot score is a good indication of how our customers feel about us – currently 4.8 stars out of 5 based on real customer reviews. (January 2021)

What are the differences between a payday loan and a credit card?

A payday loan is a very high-cost, short term type of lending. A credit card isn’t. Repayments on a payday loan are usually weekly or monthly until the balance is paid. When the repayment on a credit card is due, you can either repay the full balance, the minimum monthly repayment or a fixed amount of your choice in between. If you pay the balance, you won’t be charged any interest for that month. If you’re repaying the minimum monthly amount, then the balance is carried over to the next month plus the interest fees.

A credit card is also a revolving line of credit, which means the borrower can use at their discretion within the agreed credit limit (lender terms and conditions apply). Unlike a payday loan which is a singular arrangement, and once the loan is repaid, the agreement ceases.

Credit cards, payday loans and bad credit.

If you have bad or less than perfect credit, you may think a payday loan is your only option. It isn’t. Your credit history is one of several factors lenders look at as part of your application for credit, and there are lenders who consider applications from those with an imperfect credit background, including 118 118 Money.

Whether you’re looking at loans or credit cards, it’s good practice to use comparison websites to understand what different lenders provide. Remember, many providers have the eligibility check option. You can use this as an indicator to see if you’ll be accepted. If you find a personal loan or credit card with a more competitive rate of interest than a payday lender, using the eligibility checker can help you determine whether this may be a cheaper alternative. Terms, conditions and acceptance criteria may differ from lender to lender and your own circumstances, like whether you're employed or self-employed will all have some bearing on which is a better option. So bear all this in mind. 

If you are considering a payday loan, just be aware that there may be other options available to you.   

What is a credit check and will 118 118 Money do one?

A check on your credit history is done to look at your repayment behaviour, to see how much credit you currently have, and if you usually make your payments on time. It gives lenders a view on whether or not you meet their lending criteria. Credit checks are not only carried out by lenders during credit card or loan applications, but also carried out when you apply for a new utility supplier, a new mobile phone contract, or even a new letting agent or landlord.

You can sign up with a company which compiles credit reports to see what your own credit score looks like, before you apply for any new products. It is important to regularly check your credit file to make sure there are no inaccuracies. More information can be found on our loan tips ‘check my credit report’ page.

When you apply for a credit card from 118 118 Money a credit check will be done when you complete the full application. However, you can see if you’ll be accepted before you apply with our eligibility check for credit cards – this won’t affect your credit rating.

What if I need to check my credit card balance or have a question?

A benefit you’ll have when taking out a credit card from 118 118 Money as an alternative to a payday loan, is being able to manage your account or app whenever you want to.

If you do need to speak to us about anything at all, our Customer Service team are available from 8am – 7pm Monday – Saturday, 9am – 5pm on Sundays and Bank Holidays. You can reach them on 08000 118 222.

Apply for a payday loan alternative from 118 118 Money

Want to apply for a credit card with 118 118 Money? You can try our eligibility check first to see if you’ll be accepted before you apply – and it won’t affect your credit rating.

Read what our customers think about us

Payday Loan Alternative FAQs

There are still a number of lenders offering short term loans and payday loans. These are exactly what they say, loans which are taken over a short term of a few months and usually allow customers to borrow smaller amounts of money from £100 - £1,000. 118 118 Money does not offer pay day loans – our loans are repayable over 12 – 36 months. If you are looking for an alternative to a payday loan, then you could consider a credit card instead – try our eligibility check to find out what credit limit we’ll offer you before you apply, without affecting your credit rating.

Payday lending allows borrowers to borrow an amount of money and pay it back over a short term, usually at a high APR and collected via CPA, or ’Continuous Payment Authority'. The FCA (Financial Conduct Authority) put measures in place in 2015 to limit the interest and fees charged by high cost short term lenders. 118 118 Money is not a payday lender, nor is it a high cost short term lender. 

If you’ve had a payday loan, paying on time and in full when your payments were due could have had a positive impact on your credit score. However, even if you have paid on time and in full, lenders may perceive payday loans differently as part of their lending criteria.

Payday loans, guarantor loans, unsecured loans and bad credit loans are all types of personal loans. A payday loan however is not considered to be exactly the same as a personal loan because they are usually small loans repaid over a much shorter term of a few months, and at a much higher APR, whereas personal loans are usually for £1,000 or more and repaid over a year or longer.

Remember, 118 118 Money are not a payday lender. If you think our credit card could be an affordable alternative, begin by using our eligibility check – this doesn’t impact your credit rating. If you wish to proceed to a full application you’ll just need to provide some more info  – everything is online, so if we need any documentation from you, you’ll be able to share this with us via your mobile, tablet or laptop. A full application does require a full credit check.

If you take out our credit card as an alternative to a payday loan, based on a credit limit of £1,200, our current interest rate is 34.0% pa (variable) and our Representative APR is 34.0%.

Yes - 118 118 is a direct lender, not a broker. So, if you apply for a credit card with us, you can be assured you’re dealing with us directly.  

The Money Advice Service has more information on the options available to you here. This includes details of things such as asking for a pay advance, using your authorised bank account overdraft and borrowing from a credit union as well as other suggestions. Ultimately it depends on different factors as to whether you consider one as an alternative to another. For example, dependent on affordability and your own circumstances, you may find a personal loan or a credit card is a better alternative to payday lending.

118118Money.com

Ready to apply for a credit card from 118 118 Money?

You can try our eligibility check first to see if you’ll be accepted before you apply – and it won’t affect your credit rating.

118118Money.com