Sometimes, you might find yourself in need of some cash, but you have nothing more than your credit cards in your wallet. Whatever reason, a credit card cash advance can seem like a good option, however, before taking it out, it is important to know what they are and how do they work.
What is a cash advance?
It is a type of loan falls into the short-term loans category. It is a loan on your credit card account. All you have to do is go to a bank or an ATM, present your card and simply walk away with some cash. However, one thing that you might not know is that they come with fees or higher interest rates. Here is a breakdown on a regular purchase and a cash advance:
- Fee – this is a one-time fee that will be charged when you take an advance, and it is usually 3%-5% of the total amount. For example, if you take 200 dollars in cash in advance, the fee for it will be $6-$10 and it will be put on your account balance.
- Higher interest rate – Many banks charge a higher APR for this type of loan than for regular purchases with your credit card.
- There is no grace period – your credit card usually gives you a grace period of at least 20 days in order to pay off your purchase before the bank charges you with an interest. However, with cash advances, the interest starts from day one.
Although this might sound frightening, there are situations when an unanticipated expense hits us, and a financial solution like a cash advance might help us deal with the whole situations. Hence, these cash loans can help us since they are short-termed, as well as fast to acquire. Uncomfortable situations that can happen to all of us can cause stress, hence a cash advance option is easier. Here are several situations where opting for this solution is reasonable.
- If you are trying to avoid a credit check that will impact your credit score – when your bills are due, but you do not have the necessary fund to pay them all, you could turn to cash advances in order to pay them. They do not require a credit check, hence your credit will not be lowered.
- The loan is required in order for you to earn an income – a computer malfunction or a broken down car can lower your hourly wage dramatically. In order to keep your income steady, getting the thing you need into working order is important. It will help you get to work faster.
How to find good deals?
We live in the era of technology, hence, it is easier to find a good option with the help of the Internet. All you will have to do is type in cash advance options in your search bar and you will be able to browse through a list of offers. So, if you, for example, live in California, you can just type in cash advances in CA, and you will be able to check everything out. What is convenient is that you will also be able to see customer reviews, so you will be able to make sure that they are trustworthy.
So, taking cash in advance is the same as taking on a little bit expensive short-term loan. That is why it is important to consider everything we have mentioned here.