Avoid Cash Advance Credit Cards

Getting a cash advance on your credit card will provide you with instant cash, however there are not many circumstances where getting a cash advance is a good idea. The extra fees and conditions make getting an advance quite unattractive.

Generally you get an odd 55 Days interest free period on your credit card purchases, however with a cash advance on your card you do not get interest free days. Most banks and financial institutions bill you instantly when getting an advance. Generally the fee starts around 1% and moves up from there depending on who your credit card provider is.

For example with a low rate credit card your interest fee is around 9.99% however when using a cash advance this can move up to 19.99% with zero interest free days and an instant fee on withdrawing cash, fees can be higher than 25.99% depending on provider. Also it is good to make a note that if you withdraw from a non bank ATM (automatic teller machine) you will be charged extra.

It is important to consider refinancing if you a continually using the cash advance feature on your credit card. Using this feature frequently can cause the debt “snow ball effect” were like a snow ball gaining size and speed, your credit card debt gets larger and faster then you can pay off, sending some customers into bankruptcy.

Exhaust all other options before using your cash advance feature. If you don’t specifically need to use “cash” then simply use your credit card, this will stop the extra fees. Try to keep around 1000 dollars in saving for emergencies. Borrow off friends or family. If it’s not totally necessary or needed immediately then don’t purchase it. Ask for an extension on your payment.

The bottom line on using a cash advance feature on your credit card is use it in emergencies only or else be prepared to pay high interest immediately along with the additional fees.