Using Your Credit Card Cash Advance Options
Sometimes you need cash
Sometimes you need cash. I know, I know, it's becoming less often now that even dollar stores take plastic, but every once in a while you need to use cash for a purchase or even to put in a birthday card. If you're like me, you may have some change in the bottom of your pocket, but that's about it. All my purchases are made with my bank card or a credit card, which I pay back each month. If you don't have cash handy, you may want to use your credit card cash advance option.When you receive your credit card, it will usually give you the option of assigning a personal identification number, or PIN. This number allows you to withdraw cash from your credit card at any ATM machine. The terms of using your credit card cash advance will be different from card to card, but your credit card company is required to inform you of the interest rates and terms of using your card as well as the cash option. If you don't have a paper statement, you can usually log into your account online and find your terms. Using a card with a $0 balance is preferable to using a card with mixed transactions (purchases, cash advances, and so on) because the credit card company will apply your monthly payments to the lowest percentage rates first. This will cause the more expensive interest rate amount to continue accruing interest and will cost you more in the long run.
Credit card cash advances usually have a higher interest rate than simply using the card to buy something, so it's important to only use this option in case of an emergency. You will probably have a limit on your allowed cash that is much lower than the total amount of your credit limit. If you request more than your cash limit, the ATM may still give you the amount, but will probably flag the transaction and it could be handled just as if you spent more than your credit limit on a purchase. Overdrawing can raise your interest rate and can be a bad mark on your credit report. Unlike a regular purchase, a credit card cash advance begins accruing interest as soon as you withdraw your money, so paying it back quickly is of paramount importance.
Because of the high interest rates and possible consequences of using a credit card cash advance, borrowing the cash from a friend or relative or even applying for a payday loan, may be the preferable route. Your interest rate will be lower and the terms can be worked out according to you and your lender's preferences, rather than set in stone by a credit card company. You may even want to consider going to a cash advance store for a true emergency because the interest rate may be lower than your credit card APR, and you'll be paying the amount back from your next paycheck, which means two weeks of interest compared to the months or even years it could take to pay back the credit card cash advance.
Again, these kinds of loans and advances should only be used in case of a crisis that can't be paid for by any other means. If you plan to pay the credit card cash advance back right away, however, it can give you the money you need when you need it.
Using Your Credit Card Cash Advance Options
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