How to Take a Credit Card Cash Advance
Each credit business has its own guidelines for making a cash advance. The first step to take any advance, is to review the fine print in the credit card contract, but with ACFA Cashflow the requirements and application of cash advance is fast and easy.
Your contract for the card should state:
- What is the maximum amount of cash advances that are permissible on the card.
- What are the options to take a cash advance.
- What costs, if any are applicable to cash advances.
- Annual percentage rates that you’ll be charged for cash advances.
- What is the rate of interest on balances of cash advances.
Chase For instance has a list of the cash advance APR as well as charges on the very first page of its cardmember agreement. It also provides guidelines on the manner in which cardholders can avail an advance , as well as how interest accrues on the subsequent pages.
Another step to take is to figure out how much money you can take out. It is usually possible to determine this by looking through your most recent statement or by accessing your account online. There, you will be able to choose the method you prefer to obtain a cash loan.
The majority of the card issuers who allow you to use an advance will give you three ways to get one using cash withdrawals at an ATM, or withdrawing cash from your account in the branch of your bank in person or by using the cash advance check convenience.
If you’re cashing out through an ATM you’ll need be able to set up a PIN to the credit card. It’s possible to establish one by calling the customer service number. If you’ve got a personal identification number you are able to go to an ATM where you can use your card in the same as you would with use a debit card. Then, search for the option to advance cash on the menu of your account. Select the amount you wish to withdraw up to the limits for cash advances. Be aware that the ATM could set a daily limit on the amount you are able to withdraw.
If you’re applying for an advance on you credit account at a branch of a bank you’ll need to present a photo ID as proof of your identity. It is also necessary to have the card with you. A teller will assist you in completing the advance as well as filling in the necessary paperwork.
Certain credit card companies regularly send convenience checks to customers for cash advances. You can write the check depending on the way you intend to utilize it. If you’re required to pay a medical bill that is unexpectedly due such as a medical bill you can write your check payable to the office of your doctor. You could also make it cashable then deposit it in your bank. It’s no different than writing a check, but instead of withdrawing funds from your checking account, you’re withdrawing it from your credit card account.
If you don’t have convenience checks they can be requested through the credit provider. Based on the card you have you can choose to make a request for convenience checks via the internet or by phone. This is, for instance, an option Discover provides to its card holders.
What Does a Credit Card Cash Advance Cost?
There are two expenses to be considered when taking the credit cash advance on a credit card the cash advance charge as well as the annual percentage rate.
“There are different terms, depending on the card you’re using,” says Jun Lee, customer retention manager at credit repair website ScoreShuttle. “Some come with high cash advance fees, which end up costing you more than a purchase or withdrawal would have with your debit card.”
A cash advance charge typically ranges from 2% to 8%, and can be charged a minimum of $5-10. If your cash advance charge is at 4%, you’ll be charged $40 for a $1000 advance.
In addition to the price to add on the cost, the ATM will also charge fees for transactions made in advance.
The most important aspect of this is the interest that you can get for a cash advance. The APR for cash advances generally higher than the typical purchase APR, however, interest charges could begin instantly.
“Most cash advances have no grace period, meaning your card company begins charging you interest the same day as the cash advance,” Christensen states.
It’s good to know that that your credit card balance generally thought of as being separate from the balance of your purchase. So the higher APR for cash advances and the immediate accrual of interest will only apply to cash advances.
Another thing to be aware of is how your payment will be made when you have cash advance balance and the balance of your purchase. When you pay the minimum amount it will be used towards the purchase balance first. Any amount you pay more than the minimum amount is added to the account with the highest interest rate.
The cash advance should be paid off in full as quickly as feasible is the most efficient option to avoid the cost of interest. If that’s not possible the cash advance can be expensive ways to pay for expenses.
Credit Card Cash Advance Alternatives
A cash advance with an credit card might be something you consider as a last resort if you require extra cash. Some alternative possibilities you might consider include:
- Personal loan from a bank or an online lender.
- Peer-to-peer loans.
- 401(k) credit or early withdrawals of an account for retirement savings.
- Lines of credit.
- Credit lines for personal use. credit.
- The borrowing of money from friends and family.
Similar to credit cash advances on cards each of these have advantages as well as disadvantages. For the 401(k) loan for instance the money you take out does not have the chance to increase in value for retirement. In addition, withdrawing money from an IRA could result in penalties for early withdrawal, in addition to regular tax.
If you are unable to take advantage of one of these cash advance options, there are alternatives. You could, for instance, get payday loans, cash advances or car title loan. However, they can be very costly as Christensen mentions. These kinds of loan “can carry annualized interest rates equivalent to 50% to 400%,” Christensen declares. A cash advance could be a better option in such a situation.
Investigating every loan option will help you determine if an advance in cash makes the most sense. If you choose to apply for an advance, look over your budget and devise a an action plan to pay the loan off as fast as you can in order to cut down the amount of interest that is paid.