When you need cash fast, there’s always the option of using your credit card cash advance allowance. It’s a pretty easy thing to use, but it can cost a pretty penny too. It’s actually one of the costliest ways to borrow money. There are tons of fees involved that don’t apply with a simple ATM debit card withdrawal. Here are some of the ways a credit card cash advance can cost you more money than a debit card:
The cash advance fee. Yes, there is almost always a cash advance fee involved. The fee can range anywhere from 2% – 5% of the amount of the advance itself. So, if you pull $200 from your credit card as a cash advance and the percentage fee is 4%, you will pay $8 for that advance. That’s on top of the ATM fee from both your credit card holder and the bank ATM machine you’re using.
Interest fee. Interest rates on cash advances are sometimes higher than the regular interest rate that you’re paying.
No grace period. With most credit cards, the interest you accrue begins on day one. That means the moment you take the $200 cash advance there is no 30 day grace period before the interest rate kicks in.
When it comes to cash advances with your credit card, do your best not to take it out at all. If it’s an absolute emergency, be sure to pay it back as soon as possible.