Ok before I start a rant on how Credit Card Cash advances are bad, let me just say this, “If your dumb enough you shouldn’t do it, if your smart enough you don’t need it.” Ok That being said and done I have a confession to make. I have in the past made cash advances, most of them because at the time if fit into the first category of being dumb enough. Nowdays im smart enough to know that there is plenty of other ways to get money with a cheaper interest rate and less penalties than Credit Card cash advances.
So lets get down to business, the following is reasons why you should not do Credit Card cash advances.
- Credit Card Cash Advance Fee
You will be charged a fee just for accessing the money. This will be a flat fee, on my card its 1.5% of the amount withdrawn. This is charged straight away to your card and even if you pay it back the advanced money straight away your still incurring this fee.
- Possibly highest interest rate you will ever pay
Its quite possible that Credit Card Cash advance interest rates are the highest you could ever pay for any financial product. Many cards including mine have a cash advance rate of over 20%! So if you have credit card cash advanced a lot of money then expect to pay back far more than you borrowed as credit card cash advance money does not come cheap.
- Instantly accrue Interest
Do you have interest free days on your card? Good luck getting these on cash advances. On a cash advance the interest start ticking from the day it happens and does not stop until you pay it back. Unfortunately with some banks will pay down the balance of your “purchases” before they reduce your credit card cash advanced money.
Remember that every card is different some have lower cash advance rates and fees while others have considerably higher. These are things you need to consider when choosing your card, don’t be afraid to ask for help at the branch on which card to get. Just remember that you should always shop around and not just get the first one someone suggests you get.