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Credit Card Deals with Cash Advances

By: Wendy Drews
Submitted: 2007-10-05 14:57:37
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America is becoming a cashless society. People use plastic to pay for about everything. But there are some situations when you in a great need of cash. If you do not have a friend or a relative who is eager to lend the desired sum or if it is an emergency and you need to have cash right now the best solution seems to be to use the cash advance option of your credit card.

If you have read terms and conditions of your credit card deal you have probably noticed that cash advance APR is usually twice as high as the ongoing APR for other purchases. And there is no grace period.

Do not forget about cash advance fees – the fee rate is usually 3% of the sum you have borrowed. Sometimes the bank will simply charge you a flat fee. That means it does not depend on the amount of the money the bank has lent you. These two calculation methods can be combined thus making cash advance fees even higher.

If you use an ATM you will have to pay an extra fee set by the financial institution that ones the machine.

If you carry a balance on your credit card keep in mind that your bank will apply payments to purchases fist, not to cash advances. Your interest rate might skyrocket.

To be honest, using cash advance is one of the most expansive ways to borrow money. That is why this feature should be used only when there are no other options.

Another trick with cash advances is that you might end up paying high cash advance interest rates not for getting cash from an ATM machine but making transactions you would never expect to qualify as cash advances.

If you are a fan of online gambling websites and decide to fund the account with your credit card do not be surprised when your credit card company charges you for a cash advance. That is why it is always wiser to use your debit card or avoid those sites altogether. Chances are your hobby will cost you way more than you can actually make while gambling.

Another trap is online bank accounts. They are very convenient but many banks will charge you for a cash advance if you fund your account with your credit card. The best solution is to use your bank accounts to create new ones.

PayPal is a very convenient way of making payments online and most credit card companies would not consider funding a PayPal account with a credit card to be a cash back. However, there are certain kinds of transactions, such as direct funding or making Quasi payments that are qualified as cash backs by some banks.

So, if you are planning to do one of the above mentioned things make sure you know their policies. Read the terms and conditions of your credit card dealor contact your bank.Remember that a cash advance may cause more trouble than it is worth!

Wendy Drews helps consumers not to get lost in the world of credit card deals. She specializes on consumer credit cards.

Article source: Expert Articles

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