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-   -   Don't take that cash advance! (http://www.thefinanceforums.com/showthread.php?t=4187)

DavidBibby 08-13-2010 09:05 PM

Don't take that cash advance!
 
If you've been thinking about getting a cash advance on your credit card.. might want to stop for a moment and consider what the costs are.

Let's say I want a $500 cash advance. How much is this going to cost me in all?

1) First, the upfront fee. Some creditors charge between 2% and 4% just for the privilege of loaning you money.

So that's a potential $20.00 right there down the toilet.

2) Second, creditors don't give you a 30 grace period on cash advances.. they start charging you interest from DAY 1. So if you're the type of person who pays the balance in full to avoid finances charges.... you're TOO LATE if you used a cash advance.

3) Third, the interest rates are HIGHER on cash advances (25% - 30%) then they are on regular purchases.. so not only do they stick you from DAY 1, but they REALLY stick you from DAY 1.

4) Fourth, most cash advances are done at ATM's so you get a fee from the ATM owner too.. So if the other three weren't bad enough... the bank providing the ATM has to get a piece too.

So.. the bottom line is.. avoid cash advances.

What's your cash advance horror story??

goodyphilips 08-16-2010 07:01 AM

Re: Don't take that cash advance!
 
well fortunately never had one, since some how stayed away from them. and after reading your post i think any body, including me, will think thrice before going for cash advance.

cjscully 12-28-2010 09:15 PM

Re: Don't take that cash advance!
 
Well, since someone revived this somewhat old thread I'll chime in with an opposing point of view.

When I consider the question of cash advances I go on the assumption that there is a dire financial need for the cash advance. I don't consider that a sensible person would take a cash advance just for the heck of it.

On that note, consider a circumstance where you have an emergency expense that exceeds whatever you have in your emergency fund (or maybe you don't have one). You need the funds now for whatever reason and you can't just charge the expense to the card (unusual these days but not too far fetched), what do you do?

Payday loan? Much more expensive and potentially problematic than a credit card cash advance.
Pawn something? Might be okay if you are certain you'll be able to pay off the loan and redeem the property. It's still riskier than the cash advance though.
Borrow from family member/friend? Might work but might also seriously strain your relationship with the person you borrow from if you can't pay it back as agreed for some reason.
Auto title loan? As bad as payday loans and pawnbrokers and is only an option of you have free and clear title to your car. Most people don't.

A credit card cash advance is clearly a better option than all of the above.

DavidBibby 12-29-2010 10:49 AM

Re: Don't take that cash advance!
 
Cjscully,

I agree with you.. under such circumstances, the Cash Advance is the least expensive and least risky among all the choices you outlined.

The sad truth is that people ARE using cash advances in a harmful way... not in an emergency situation, but for regular use despite the fact that credit cards are accepted virtually anywhere.

Thanks for your comments.. I like it when people chime in.

samwilson 01-10-2011 10:17 PM

Re: Don't take that cash advance!
 
Quote:

Originally Posted by cjscully (Post 20397)

Borrow from family member/friend? Might work but might also seriously strain your relationship with the person you borrow from if you can't pay it back as agreed for some reason.

If it's a family/friend, and if you think they understand your situation, I think you should worry more about IF they could lend you money than "seriously strain our relationship with the person". I don't think a good friend/family member would get mad at you if you can't pay it back in time.

Well, unless you've borrowed a million, that's a different story. :D Kidding aside, just make sure you don't take too long paying it back.

ralphegermain 02-09-2011 03:27 AM

Re: Don't take that cash advance!
 
Quote:

Originally Posted by DavidBibby (Post 20421)
Cjscully,
The sad truth is that people ARE using cash advances in a harmful way... not in an emergency situation, but for regular use despite the fact that credit cards are accepted virtually anywhere.

As what has been mentioned, Cash Advance can be very useful and comes in handy IF or In an Emergency cases. But most credit card holders would just use them anytime they feel like. A night out drinks is not counted as emergency. Though many would think I am being crazy!

FinanceOcean 03-05-2011 09:23 AM

Re: Don't take that cash advance!
 
I agree that a cash advance can be expensive. I have seen some deals lately that might be helpful.

I was able to get an advance of a few thousand dollars to pay off the remainder of a home equity line that was coming due. The advance had an up-front rate of 4% and carried 0% interest for a year.

Since my only other choice was to finance other expenses with a credit card (at 12%) and I could pay off the balance in a year, it made sense.

I'm shocked by the lack of financing available compared to a few years back. I haven't had to use it much, and now that I could use it, it's seriously expensive.

The markets at work ...

wafiyag 11-10-2015 08:34 AM

Re: Don't take that cash advance!
 
You are absolutely right David, Cash advance is a very bad thing given by bank on which they charge more and more. As David said avoid cash withdrawn from credit cards. It's a really bad thing and will cost you more and more.

Pawnbroker 07-26-2016 08:52 PM

Re: Don't take that cash advance!
 
Cash advances aren't always bad, just usually. Use it wisely, pay it off quickly, and you might not get hurt doing it.

ed.buyer 09-05-2016 01:01 PM

Re: Don't take that cash advance!
 
Quote:

Originally Posted by DavidBibby (Post 17244)
If you've been thinking about getting a cash advance on your credit card.. might want to stop for a moment and consider what the costs are.

Let's say I want a $500 cash advance. How much is this going to cost me in all?

1) First, the upfront fee. Some creditors charge between 2% and 4% just for the privilege of loaning you money.

So that's a potential $20.00 right there down the toilet.

2) Second, creditors don't give you a 30 grace period on cash advances.. they start charging you interest from DAY 1. So if you're the type of person who pays the balance in full to avoid finances charges.... you're TOO LATE if you used a cash advance.

3) Third, the interest rates are HIGHER on cash advances (25% - 30%) then they are on regular purchases.. so not only do they stick you from DAY 1, but they REALLY stick you from DAY 1.

4) Fourth, most cash advances are done at ATM's so you get a fee from the ATM owner too.. So if the other three weren't bad enough... the bank providing the ATM has to get a piece too.

So.. the bottom line is.. avoid cash advances.

What's your cash advance horror story??

not a good idea

emilyhilscher 05-11-2017 08:20 AM

Re: Don't take that cash advance!
 
thank you so much for sharing David

divi 06-10-2017 04:37 AM

Re: Don't take that cash advance!
 
Hi,
Yea you are right, Cash advances are very bad, it can charge you so much in the name of interests. Before buying a credit card we should know how to use it and where to use it or else it would land us into problems very badly. even though there are many benefits of a credit card, they are applicable only if we use it properly. https://www.youtube.com/watch?v=JcMM...ature=youtu.be this video gives a good explanation on how to use a credit card.

Mark100 08-24-2017 08:34 AM

Re: Don't take that cash advance!
 
So I use worldcore debit card for all my online transactions, I do not love to carry cash and also do not want to advance cash. Thatís an absolute advantage that Worldcore cards daily ATM withdrawal limit is 4,000 Euros and monthly limit is 120,000 Euros. The company promises to work round-the-clock to provide the fastest possible turnaround time for people signing up to the payment account via the website.

make payment online


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