I gave an example in another comment: https://news.ycombinator.com/item?id=29656265 https://news.ycombinator.com/item?id=29656265 Because the thing you're buyi

I gave an example in another comment: https://news.ycombinator.com/item?id=29656265 https://news.ycombinator.com/item?id=29656265 Because the thing you're buying is short term, unsecured credit, it's generally pretty fungible. Regardless of the credit product - payday loan, credit card, line of credit, or something else - what you're paying for is immediate access to money. And in most cases, these products allow you to borrow as much (or as little) as you want - so you're not going to "overborrow". This is more like comparing the cost of buying 30L of water in 330ml containers for $2/ea vs. in 481ml containers for $3/ea except the math for compound interest is harder to do correctly.