The promise of cash advance, especially when that is linked with your charge card is wholly tempting. The very thought of instant money right in your metallic card is so convenient that you always fall prey to this offer. The actual fact, however, is that using the cash advance option of one’s charge card is more impractical than practical.
How come this so?
First, cash advance transactions do not have any grace period. Unlike card purchases giving you 30-45 days before you will need to cover those transactions, cash advance doesn’t work this way. Which means that even in case a day after you’ve taken the amount of money (from the ATM) you’ve made payment, you’ll be faced with the corresponding finance charges. In a nutshell, the moment the amount of money is released out of the ATM, then you’re in for a comparatively high interest rate.
Now, this little bit of information may possibly not be easily available because this isn’t really the principal purpose why people get a credit card. People who apply for those metallic, magnetic and plastic cards want to create card purchases in a common stores or want to cover in establishments where Visa’s and MasterCard’s are quite definitely welcome. The requirement to avail of this cash advance option gets emphasized if you want immediate cold cash — for transactions that not accept your prestigious cards.
Second, cash advances have different interest rates — and always, these are slightly greater than those imposed on charge card purchases. And because cash advance transactions do not need a grace period, the general finance charge imposed on you may skyrocket!
Wikipedia reports that in the US, interest rates for card purchases vary between 6% and 12%. The interest rate (remember, that is charged to you outright, no grace period given) for cash advance is between 20 and 25%!
Still, some card providers charge a set rate for cash advance transactions. So whether you’ve borrowed $100 or $300 in cold cash, the finance charge will be the same.
And the list doesn’t end. Other card providers charge a combination of percentage and flat rate as finance fee 정보이용료 현금화. Imagine the total amount of money that you have to repay out of an easy and one-time withdrawal from your charge card!
Lastly, some credit organizations require you to pay your card purchases first. Which means that if you don’t have lowered your charge card bill to a minimum or to zero, you’d continue steadily to accrue interest rates for your cash advance. They simply deduct your payment from your cash advance balance once your payables from your purchases are cleaned.
Now imagine if you fail to fully pay your balance in a month’s time, think of simply how much interest rate the financial institution can collect from you from your cash advance! Yes, you almost certainly wouldn’t want to calculate it unless you intend to have a heart attack.
True, you might get instant cold cash through cash advance nevertheless the repercussions of this action may be definately not favorable. You may not need to put up collateral or to wait in long lines because charge cards automatically give you another cash advance limit. All you have to do is line up in an ATM. But the finance charge for cash advance transactions could kill you.
Therefore, before you determine to use that credit card to get instant cash, think again. Other methods have to be exhausted first. You might want to avail of personal loans, payday loans or you may even borrow money from a friend. Charge card cash advances must be the last resource because more often than not, this choice is highly impractical.