Need Fast Cash? Consider a Credit Card Cash Advance

Every individual’s life is full of ups and downs, from our moods to our finances. Even the most financially responsible and prepared individuals can be hit with a sudden emergency which requires liquid assets that they might not possess. So what is the answer to this problem? For many people, a credit card cash advance could be an easy solution to a lack of liquid funds at a crucial moment in time. Before considering this type of cash advance though, individuals should be fully informed about what they are getting into so they don’t further destroy their financial standing.

A credit card cash advance is a cash advance that is borrowed against the credit limit of an individual’s credit card. There are two common methods of getting cash through a credit card cash advance. The first is to swipe a credit card at an ATM and borrow money on the spot. The other is to use cash advance checks that credit card companies often mail to consumers. In either case, there are fees and interest rates associated with the credit card cash advance. The interest rate charged by many credit card companies is often higher than that which applies to purchases made on the card. Each company works differently when it comes to fees, some will charge a flat fee regardless of the amount borrowed while others will charge a fee of between 2% and 4% of the amount borrowed.

The most important thing to realize about a credit card cash advance is the fact that interest will start accruing on the money borrowed the moment the cash is in your hands. This type of cash advance can be very damaging to an individual’s financial situation, even though it was meant to help ease a financial emergency, they can often lead to future problems. However, just because that can happen does not mean it will or has to happen. Consider the following ideas when dealing with a credit card cash advance:

• Credit Card Agreement: Read and make sure your understand all the terms and fees included in your credit card agreement before borrowing against your credit limit. If you are unclear about anything, call a customer service rep.
• Evaluate Your Need: Credit card cash advances in particular should be used only for a true emergency. If you have an immediate medical emergency that is one thing, using it to pay for everyday expenses like gas is not wise.
• Know The Limits: Some cards do not allow cash advances up to the credit limit on the card and borrowing over your limit can result in extra charges and even higher interest rates.
• Don’t Overdo It: Take out only what you need to cover the emergency, taking out more will only result in more needing to be paid back.
• Use A Clear Credit Card: Try to use a credit card that has a $0 balance. When you make payments back, most companies apply payments to low interest balances first, meaning your high interest cash advance balance increases thanks to finance charges.
• Use Restraint: Once you’ve borrowed money, use discretion when spending in the future until you have paid back the loan.

A credit card cash advance can be expensive and tricky, but it is also a safer alternative than other types of cash advances such as a payday loan. The key to borrowing without falling into further financial trouble is to manage the fees and understand what you are getting in to before borrowing.