The promise of cash advance, especially when this is linked with your bank card is totally tempting. The idea of instant money right in your metallic card is really convenient that you usually fall prey to this offer. The very fact, however, is that using the cash advance option of one’s bank card is more impractical than practical.
How come this so?
First, cash advance transactions do have no grace period. Unlike card purchases that give you 30-45 days before you will need to cover those transactions, cash advance does not work this way. This means that even if your day after you’ve taken the cash (from the ATM) you’ve made payment, you’ll still be charged with the corresponding finance charges. Simply speaking, as soon as the cash is released from the ATM, then you’re in for a comparatively high interest rate.
Now, this little bit of information may possibly not be easily obtainable because this isn’t really the primary purpose why people get yourself a credit card. Those who apply for anyone metallic, magnetic and plastic cards want to produce card purchases in their favorite stores or want to pay in establishments where Visa’s and MasterCard’s are very much welcome. The need to avail of this cash advance option gets emphasized when you really need immediate cold cash — for transactions that not accept your prestigious cards.
Second, cash advances have different interest rates — and always, they are slightly greater than those imposed on bank card purchases. And because cash advance transactions do not need a grace period, the general finance charge imposed on you could skyrocket!
Wikipedia reports that in the US, 구글결제 현금화 interest rates for card purchases vary between 6% and 12%. The interest rate (remember, this is charged to you outright, no grace period given) for cash advance is between 20 and 25%!
Still, some card providers charge an appartment rate for cash advance transactions. So whether you’ve borrowed $100 or $300 in cold cash, the finance charge could be the same.
And the list does not end. Other card providers charge a mix of percentage and flat rate as finance fee. Imagine the quantity of money that you have to repay out of a simple and one-time withdrawal from your bank card!
Lastly, some credit organizations require you to pay your card purchases first. This means that until you have lowered your bank card bill to the very least or to zero, you would continue 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 just how much interest rate the financial institution can collect from you from your cash advance! Yes, you almost certainly wouldn’t wish to calculate it unless you intend to have a center attack.
True, you may get instant cold cash through cash advance but the repercussions of this action might be definately not favorable. You may not need to put on collateral or to attend in long lines because credit cards automatically provide you with a separate cash advance limit. All you have to accomplish is line up in an ATM. Nevertheless the finance charge for cash advance transactions could kill you.
Therefore, before you choose to use that plastic card to get instant cash, think again. Other methods need to be exhausted first. You might want to avail of personal loans, payday loans or you can even borrow money from a friend. Credit card cash advances must be the last resort because more frequently than not, this choice is highly impractical.