The promise of cash advance, specially when that is tied to your bank card is totally tempting. The thought of instant money right in your metallic card is really convenient that you generally fall prey to this offer. The actual fact, however, is that utilising the cash advance option of your bank card is more impractical than practical.
Why is this so?
First, cash advance transactions do not have any grace period. Unlike card purchases that give you 30-45 days before you’ll need to fund those transactions, cash advance doesn’t work this way. Which means that even if a day after you’ve taken the money (from the ATM) you’ve made payment, you’ll be faced with the corresponding finance charges. In short, the moment the money is released out from the ATM, then you’re set for a comparatively high interest rate.
Now, this bit of information may not be readily available because this isn’t really the primary purpose why people get a credit card 콘텐츠이용료 현금화. Those that apply for anyone metallic, magnetic and plastic cards want to make card purchases in their favorite stores or want to pay for in establishments where Visa’s and MasterCard’s are very much welcome. The requirement to avail of this cash advance option gets emphasized when you 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 have a grace period, the overall finance charge imposed on you could skyrocket!
Wikipedia reports that in the US, interest rates for card purchases vary between 6% and 12%. The interest rate (remember, that is charged for your requirements outright, no grace period given) for money advance is between 20 and 25%!
Still, some card providers charge an appartment rate for money advance transactions. So whether you’ve borrowed $100 or $300 in cold cash, the finance charge could be the same.
And the list doesn’t end. Other card providers charge a variety of percentage and flat rate as finance fee. Imagine the amount of money that you’ve 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. Which means that if you don’t have lowered your bank card bill to the very least or even 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 cannot fully pay your balance in a month’s time, think of simply how much interest rate the financial institution can collect from you from your cash advance! Yes, you probably wouldn’t want to calculate it unless you wish to have a heart attack.
True, you can find instant cold cash through cash advance nevertheless the repercussions of this action may be not even close to favorable. You may not need to put up collateral or to hold back in long lines because charge cards automatically give you a different cash advance limit. All you’ve got to do is fall into line within an ATM. Nevertheless the finance charge for money advance transactions could kill you.
Therefore, before you choose to use that credit card to get instant cash, think again. Other methods need to be exhausted first. You may want to avail of personal loans, payday loans or you can even borrow money from a friend. Credit card cash advances ought to be the last resort because more often than not, this choice is highly impractical.