Credit Card Cash Advances

While a credit card for most things it pays these days every now and the call for good old fashioned cash. Most of the time, you probably access cash at an ATM with a cash card linked directly to your bank account. However, if your bank account is running low or the ATM Fund in the position you are not accepted in your card then an option to get access cash with your credit card, advance through an ATM. Some banks even offer> Credit checks that are used to pay for products, but are treated like a cash advance, you can not buy a normal credit card.

Should you be worried?

There is no question that credit card cash advances can act as a very valuable feature. Those who go abroad and put in cash, the lifeblood grateful makes available. Your credit card allows you to get a cash advance anywhere in the world, from places as convenient as the ATMs everywhere.

Before you know need the credit card cash advances there are things you start. In general, a payment will cost more than the purchases you charge on your credit card. Consider the following:

Finance charge: There are maps to find the bend the rules but you are a cash advance with most cards you draw a higher April as sales prices. This is very typical, even low-interest credit cards. For example, a low interest> Credit Card from an Australian bank a cash advance rate of 18.75 per cent (as at 12 March 2008), whereas the purchase of 12.99 percent. Be aware that the difference in interest rates can be very significant.

There is a reason for it. Credit card companies earn some income to pay for your purchases because merchants to process and receive the payments for the transactions. A merchant cash advance is not involved in a transaction, so that the credit card companiesto earn no fees.

Grace period: Credit card issuers normally grant a grace period on purchases and interest on this fee only if you do not pay the amount at maturity. Not receive a cash advance, so the grace period and interest is charged from day one. A $ could not buy 500 credit in the interest of cost if you would require the payment of the invoice paid in full length on its due date, a $ 500 cash advance at 18 percent full at the end of April in one month that up to $ 7 pay 50Interest.

Payment: Card issuers will often require an advance transaction fee, shown as a percentage of the cash advance. Typically the fee ranges 2 to 3 percent, but with a minimum (eg $ 10). In the above example you would pay $ 10 - $ 15 (2-3 percent) as a transaction fee on the $ 500 prepayment.

In the above examples, the $ 500 for the purchase of emission rights would not cost anything in interest or fees, but the $ 500 cash advance would cost a total of $ 17.50-$ 22.50.

Thatis the bottom line: Credit card cash advances are more expensive than credit purchases. The message is that cash advances should be used cautiously and only in emergencies.

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