Credit card cash advance
ByRead this and learn how a credit card cash advance can help you to get out of debt once and for all.
A cash advance on your credit card can be a very convenient option but at the same time is what I like to call a debt trap. Credit card companies these days are charging almost 30% interest and it is to their benefit to get you to borrow as much money as possible.
Keep in mind that the credit card companies are paying little or no interest on the money themselves that they are lending to you. How would you like to get money at no cost to you and lend it out at 30% interest? Just form your own credit card company. Loan sharks used to get arrested for charging that kind of interest so what they did was form their own credit card companies and now loan sharking is legal.
Cash advances are done a couple different ways. One way is by using your credit card in the ATM, which is a huge and sometimes overwhelming temptation. However, the cash advance is not considered by the credit card companies to be a regular purchase and is subject to an off the top penalty of 3% of the withdrawal amount. Bet you did not know that did you?
Another method of cash advances is those little checks you get at the bottom of your credit card statement. To fill one of those babies out and cash it “just like a regular check” is going to cost you 3% off the top and will also be subject to a higher interest rate. When you get your credit card statement the first thing to do is take the checks at the bottom of the statement and tear them up. Mary used to tear up those checks before I could get my hot little hands on them. Mary is smart! Whoa Mary.
How about some more bad news? On most occasions the rate of interest on cash advances is higher than the normal interest rate on your credit card and you will be charged interest beginning the day you withdraw the money. This interest is not started at the end of the month like normal purchases.
And on top of all that, you will have to pay the ATM fee which is which is only a few dollars but these fees add up for the credit card company.
If you absolutely need some cash and you don’t have your ATM card with you what I would recommend is to go to a restaurant or grocery store and then using your credit card and getting cash back on the purchase. The cash back will be added onto your grocery bill and the credit card company will not treat it as a cash advance but as a normal purchase and your cash advance will be subject to lower interest rates and you will avoid the fees. Jimmy smart boy, huh? My mother always said I was smart and now it’s paying off.
Jimmy says, do not use your credit card for cash advances unless you absolutely have to during a dire emergency and you have no other options, and then use it with the understanding that you’re going to have a higher interest rate and there will be a 3% penalty involved.
Whoa Jimmy?
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Credit card cash advance should only be used as a last resort and if you have any experience in this area please share with our readers in the comments.
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