Get A Cash Advance Loan Instead Of From Your Credit Card
You get a cash advance by using the PIN you received with your credit card at an ATM or going into a bank for the advance
. You can also use this feature by using the cash advance checks that the credit card issuer might send to you.
Sounds like a good, flexible way to use your card, right? Well...you might need to give it some thought before you plunk down your card and ask for some cash.
Specifically you'll want to understand the APR and any fees that will apply. In most cases you will be charged a fee for taking out with your card.
This fee can be stated in terms of a flat per-transaction fee or as a percentage of the amount. For example, it may be defined as "3% or $10." This would mean that you would be charged either 3% of the amount of the cash advance or $10, whichever was greater.
You should understand how this fee will be charged. Depending on the credit issuer, the cash advance fee may be deducted directly from the cash advance at the time the money is received or it may be posted to your bill as of the day you received the advance.
Another cost that should be considered as part of a cash advance is the Annual Percentage Rate, or APR, that you will be charged for this type of transaction.
You should know what the APR for cash advances is on your particular credit card account. Generally, the APR for cash advances is considerably higher than it is for purchases.
The cost of a cash advance may also be higher because there generally is no grace period. Interest may start accruing from the moment the money is withdrawn. Overdraft protection is a service to help you prevent returned checks and overdrafts on your checking account.
Wait a minute, right? We were just talking about credit cards, not checking accounts. In this case, overdraft protection is where your two accounts might meet.
Overdraft protection is often offered three different ways: by linking your checking account to a savings account, a credit card or a line of credit. So, for example, if you were to spend more money than you actually had in your checking account, the needed additional funds would come out of one of these other accounts.
If your overdraft protection service is linked to your credit card, you should know that a advance fee and the cash advance. APR will likely be charged to your account for any funds that need to be paid into your checking account to cover your overdraft.
So understanding how these services function for both your checking account and your credit card is a must. It can be much easier to just not pay back the total amount you borrowed.
The amount you borrowed is added to your balance and in most cases, your minimum payment goes up. But how easy it is to justify your money for other things and just pay the minimum payment?
Too easy. So let's explore a cash advance loan. These loans are quite easy to apply for and you can usually have your money in just a few hours. Cash advance loans are serious loans that should be taken as such.
Just because they are easy to avail does not mean that they are easy to avoid paying back. They are short term loans, meaning your term is only for a couple of weeks.
And you negotiate with the lender a date upon which you will pay it back. You either write a post dated check that the lender will cash for repayment of the loan, or you will authorized a post dated draft to your checking account.
Then the loan is paid back in a few weeks instead of dragging on for months or years accruing a 20%+ interest rate. It is a better option in most cases to simply avail a cash advance loan instead of getting a cash advance through your credit card.
by: Jack Landry
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