Credit Card Cash Advances
Should You Take Money Out of Your Visa or MasterCard?
Need Cash? What you need to know before taking it from a credit card. A look at other sources for quick money.
You need money to pay off a debt. Maybe you lost your job or had your eye on a flea market item that will only accept cash. Whatever the reason, it’s not good enough. Never take a cash advance from your credit card.
Why a Credit Card Cash Advance Is a Bad Idea
- For every cash advance you take, the card issuer will charge you a fee. Those little checks you get in the mail from your credit card company may look tempting. But every time you use one you’ll get charged up to four percent. That doesn’t even count the interest you’ll pay if you only make the minimum payment at the end of the month. Some banks charge a flat rate instead of a percentage. That could be even worse, especially if you’re only taking out a small amount of cash.
- Read the fine print carefully. Even if you think you’re getting a good deal, you’re probably not. Say you get checks in the mail from your card issuer. Whatever the offer says in big bold letters, be sure to read the fine print at the bottom of the page. It will tell you what real deal is. And often, it’s not pretty. Remember, banks don’t just give cash away. There has to be something in it for them.
- Watch those ATMs. If you take cash from a credit card at an ATM, you’ll pay even more in fees. The owner of the machine wants a cut as well.
Where Should You Go if You Need Quick Cash?
- First try your local bank. If you own property, consider a home equity loan, or line of credit. The interest rate will be a lot lower than a credit card, but your house is at stake if you don’t repay the loan.
- Take out an unsecured loan. If you have good credit, take out a personal loan at the bank. Make sure you find out what the processing fees are before you sign on the dotted line. And negotiate the best possible interest rate. Even if it means talking to a manager. The better your credit score, the more negotiating power you have.
Bottom line: A cash advance is almost as bad as a payday loan. Quick money is expensive money. Better to earn it slowly by saving in a high yield account. If you’ve lost your job, file for unemployment insurance immediately, and talk to your landlord about the situation before it becomes dire. Remember, cash advances are never worth the steep price you pay.
The copyright of the article Credit Card Cash Advances in Consumer Education is owned by L. Marie Dubuque. Permission to republish Credit Card Cash Advances must be granted by the author in writing.
