Credit Card Cash Advance By Bosoxy on - Updated Sep 18, 2011
Outside of cash advance institutions, those who carry a credit card have a cash advance at their fingertips.
While I would prefer to never use a cash advance due to high interest rates and possible fees from the ATM, using available credit from a credit card that I hold for cash is much less expensive than other quickie cash advance loans that are out there.
For one thing, if I use my own available credit on a credit card with a zero balance that I hold for emergencies and pay it back before my next credit card bill statement I can avoid paying the higher finance charges that are assigned to cash advances.
Using a personal credit card also allows me the choice to pay back the cash advance over a longer period of time, something that is often not an option at a cash advance institution… or if it is available, even at the higher rate assigned by the credit card company, it would be difficult to not have a lower percentage rate with the credit card company than by institutions that make their business giving out quick cash loans.
The problem with using a personal credit card for a cash advance loan is that if there is a balance on the credit card, most credit card issuers are going to apply payments to the balance with the least finance charge first. Therefore one would have to pay off the entire balance on the credit card in order to keep from paying the inflated cash advance finance charges. If the card is one that always carries a balance, the rate that is assigned to that cash advance could really add up!
For this reason, I would highly recommend not using the cash advance option of your credit card unless you have a zero balance, or close to a zero balance.
If you do choose to take out a cash advance on your personal credit card, do ensure that you are fully aware of all of the terms, including the higher finance charges and any associated fees. If you are not familiar with them, do look at a recent bill, check it out online or have your credit card company send you the terms in print. Once you actually use the card, you have agreed to the terms so do know what you are getting into in advance and use it only as a last resort.
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Visa Cash Advance
Thanks for all of the valuable information!
I do believe this is a much better alternative to cash advances. I have seen friends of mine get themselves into some real binds with cash advance places. Thanks for sharing all the great information.
I could not agree with you more-I too would use the credit card advance if my balance was close to zero-thank you so much for your insight!!!
Wise advice. I have learned this from my own experience.
Sometimes these make a lot of sense almost because of the no-hassle factor if you are aware of what the other drawbacks, which you enumerated so well, can be. Thanks!
Great info for peole who dont know these things
This is a good option for those who need money fast. Although if you can't repay it before the next billing cycle it might be a big mistake for a large amount of money. The interest rates will get you!
You are so right. MOst of my credit cards offer a cash advance. I just never use it:0)
This was really informative. I've never thought of doing this, though our credit card keeps sending us those "checks" from time to time. Thank you!
This is excellent advice. Thank you for warning about the disadvantages of using credit cards for cash advances .