While cash advance credit cards let you use a part of your credit line to withdraw cash, there are a variety of fees and fine print issues which you should Learn More before proceeding with a cash advance. Getting a cash advance from the credit card of yours is a lot easier than ever. Nevertheless, one should be conscious of the expenses associated with taking a cash advance before inserting the credit card of theirs into an ATM. While you will find a limited amounted of credit cards that offer zero % cash advances for one year, most charge higher interest rates on cash advances than they do on regular purchases.
First, there’s a 99% chance of being charged a cash advance fee. Of the more than seventy credit cards covered on Credit Card Depot, I couldn’t locate a card that charged much less compared to a 2.9 % cash advance fee. Some cards even impose a ten dollars minimum fee. Which means the cash advance fee can be 5 10 % in case you’re just taking a hundred dollars or perhaps $200. Taking out under $300, thus, can be costly.
Today, unless you take advantage of a zero % interest cash advance offer, you’ll additionally be charged a higher interest rate on the cash you take out. For instance, a popular credit card with a variable 11.24 % interest rate on purchases charges 23.49 % on cash advances. This’s not the exception, but the rule. No matter the credit of yours, you’ll probably be charged twenty-three % or perhaps higher on your cash advance balance.
There is another sticky issue here. When you repay the credit card of yours, your dollars go first to the balance which is being charged probably the lowest interest rates. For instance, let us say you have a $2000 balance from purchases at 11.24 % and a $thousand balance from cash advances at 23.49 %. Until you’ve paid off the $2000 from purchases, you are going to continue to pay the higher interest rate on your cash advance. Thaïs a sad trap a lot of cash advance users fall into.