It is known to everyone that most credit cards give an option of withdrawing a cash advance from your credit line on your card. How to do this is so simple, you just go to ATM and use your credit card to withdraw cash, like it is a kind of debit card.
However, before doing a cash advance through your credit cards, you must know the conditions and understand what it was written there. Since most advances have higher interest rates rather than using your cards for purchases things you need to purchase.
Usually advances on credit cards have different interest rates on the balance of your credit card. Although it vary slightly from one company to other company and the interest rates is usually set at 20% – 25% depending on the company where you got your card.
And most of cash advance have flat interest rates you take out. Example is that, for instance you have a cash advance of $50 or more, then you will be charge $10 as for the privilege and not only that because the ATM where you withdraw the cash will also charge a fee.
In an advance on your credit cards, be aware that you have to pay off that by the end of the month because if you don’t pay it off your balance, for sure the interest rates which is higher than the regular purchase will get bigger. Remember that the moment you have your cash and the minute when the ATM spit the cash out, then it starts with the interest.
There are some companies will require you to pay off any non-cash advance balance that you had before they will allow you to apply your payments to your advance.
In short, forcing you to pay down the amount with the lower interest rate first before the advance, so be aware of it. Since there are lots of people frequently use their line of credit without knowing any of it.
So, thinking that you have any benefits of using your cards for cash advance, you are far outweighed by it. Most people when they have financially insecure, they use their cards to have cash advance without thinking that it worsen the situations more since at the end of the month, they have to pay off the balance.
Sometimes, you have to think over and over again either having cash advance on credit card can do well to you or not before jumping into conclusion. Remember that in every problem there is a solution and never give another problem to your problem especially financial.
If you can borrow to your friend without an interest, then that would be better rather than having cash advance with a higher interest rates.
It is so nice to listen to credit cards companies’ strategies but not knowing how it can affect that to your life and your financial problem. Use the cash advance if it is an emergency, never use it just to buy unnecessary things or your wants.