What is a credit card cash advance?
A credit card cash advance is cash which can be accessed with a credit card. To get a cash advance, a credit card user swipes the card at an ATM, enters a personal identity number (PIN), and receives cash in exchange. Most consumer advocates strongly urge against getting a credit card cash advance, and people who need a source of ready cash should definitely consider alternative sources, as credit card cash advances come with a number of hidden strings. Usually, a credit card statement will inform the consumer how much credit he or she has “available for cash.” This is typically a percentage of the overall credit limit which can vary, depending on the consumer’s credit score and other factors. To access the cash, the consumer needs to get a PIN from the credit card company. Many credit card companies also use “credit card checks,” which work exactly like a credit card cash advance. There are a number of problems with the credit card cash advance. The first is that the cash advance is u
• Short term financial difficulties. A credit card cash advance helps people that are struggling with financial difficulties. It becomes possible to make essential payments, such as buying food and paying the rent; • Convenience. Applying for a loan or overdraft increase can take time. However, a credit card cash advance simply involves going to a cash point machine or writing out a credit card cheque; • Emergency situations. There may be nowhere that will take a credit card once it gets late. A credit card cash advance may help cover an emergency situation, like being able to afford a taxi home when there are no other sources of public transportation available; • Bad credit. Having adverse credit means that other sources of credit may not be available to a borrower. Those with an existing credit card can get an advance. Although it is a high APR, the interest rate is still considerably less than many bad credit bank loans or payday loans.
A credit card cash advance is an opportunity for a consumer to borrow money against their permitted credit limit. A credit card cash advance doesn’t simply extend to withdrawing money from a cash point machine, it can also be a credit card cheque or a gambling transaction. Consumers pay a high APR and various withdrawal charges for the convenience of credit card cash advances.
A credit card cash advance — whether from an ATM machine or through convenience checks — is just about the most expensive money you can buy, short of a pay-day loan. Here’s why: • The amount advanced will cost you an upfront fee of 2% to 4%. If you borrow $4000, then a 4% fee will come to $160. • Check the fine print. The interest rates on the cash advances are much higher than the card purchases. A rate of 21% for this money is not unusual. • Unlike most credit cards, cash advances have no grace period. Those high interest charges will start to mount the moment you take the money from the ATM. Keep in mind that the interest rate will be tacked on to the fee as well ouch! • Don’t be surprised to find the creditor applying your payments to balances for purchases first. You get to apply funds to cash advance balances only after the lower interest rate purchases are paid down.
Assuming you’ve been in business for more than four months and your business receives at least $2,500 in credit card sales each month we give you a lump sum of cash based upon your monthly credit card sales. Each month, a small percentage is deducted from your credit card sales until your entire credit card advance has been repaid. Based on your monthly credit card sales, we will let you know how much money we can advance you and the percentage of credit cards sales that will be used toward paying back your advance. What is the advantage of a credit card cash advance? If you need money right away for unexpected business expenses or opportunities and you need to act right away; a business cash advance could be the best choice. This is especially true if your credit is less than perfect.
