Credit card cash advances are some of the most expensive financial services that are available for consumers to take advantage of. Though it may seem simple enough going to the credit card kiosk or ATM to request a cash advance and taking out sixty, eighty or even a hundred dollars, these funds that are withdrawn from the credit card account via cash are charged interest from the time that they are withdrawn – costing the consumer interest until the debt has been repaid.
What types of charges and fees are associated with credit card cash advances? Fees associated with the cash advance range between five to seven dollars. The customer must pay these fees at the time that the funds are withdrawn from the credit card account, and in the case that there are not enough funds in the account to cover the cost of the withdrawal and the fees, the transaction is often declined.
In addition to the fees that are charged to the consumer at the time the credit card cash advance is being made, the consumer must also face interest charges. Interest charges are accumulated from the moment the credit card cash advance is taken, and charged on the amount that has been borrowed.
What customers don’t know about cash advances is the fact that the interest remains to be charged on this cash advance until the customer has repaid the entire balance of the credit card. This means the customer must repay the entire balance of the credit card, and continue to repay it monthly while achieving the zero balance to ensure that the fees and charges for the cash advance is going to be minimal.
Customers should realise that the credit card should never be used as an emergency lending system. Credit card cash advances are an expensive way to gain access to funds and should be used as the last resort for consumers that are short on cash. Ensuring that the consumer has established an emergency used to offset those unexpected expenses and emergency expenses that can happen in the budget.
In the case that a credit card cash advance is used, the customer should ensure that they are going to repay the credit card cash advance in a reasonable time period, as there is no grace period for the cash advance like there is for the purchases that are made on the credit card. Since interest is being charged to the consumer on a daily basis, and on the full amount that had been withdrawn, the customer is going to continue to see these interest charges until the balance has been paid in full. Consumers with a high balance on the credit card that is not repaid within the month should avoid these credit card cash advances completely, as they can be a dangerous way to supplement the income.
Using these tips can be an effective way for consumers to remain protected while using their credit card and give the consumer the information needed to stay out of debt while paying less interest.