Credit Card Advance
Credit card advance, specifically known as credit card cash advance, is a helpful financial tool for short term cash needs. For some people, it is a convenient option to get quick cash when they need it. However, while credit card advance provides critical assistance to those in need, some believe that cash advance is a debt trap. By managing your debt and finances properly, you have less chance to resort to a patch solution like credit card advance.
It is important to know how credit card advance compare with other financial tools. Educated customers will tell you that a credit card advance is more expensive than using a credit card due to the additional fees attached to these loans. At the same time, these fees should be paid immediately. However, people with debt problems depend on cash advance to bail them out on other debt and expenses. Although they understand the fees attached to these loans, they are largely ignored. If you apply for a cash advance, take these fees seriously and make sure that they are within your budget.
Cash advance rates are calculated differently depending on the lender agreement. One method used is that the lender charges a certain percentage of the cash advance amount plus a minimum fee of ten dollars for any amount advanced. The second method used is lenders charge a certain percentage of the loan amount or a thirty dollar fee whichever is greater. Understand how these fees work by reading the terms and conditions in the credit card agreement. Ignoring these conditions may do you harm in the future.
One other reason why credit cash advance is not practical is that fees can be charged to you even when you do not know it; consider for example, ATM's collection fees when you get a credit card advance. This further adds to the already exorbitant cost of credit card advance. Additionally, the interest rate charged in a credit card advance is greater than regular card purchases. Rates applied to regular card transactions are 15% to 17% while the rates applied to credit card advances fall between 20% and 25%.
One last thing to remember is that there is no grace period applied to credit card advance. Once you apply for an advance and receive your cash, the interest is applied immediately. Credit card advances are useful tools for emergencies, but they can spiral consumers into a debt trap if they are not careful.