Credit Card Cash Advance

Hey WalletHubbers! Today we’ll talk about credit card cash
advances — how they work, what they cost and important tips. First off, there are two types of credit card
cash advances. The first and more common type happens when
you treat your credit card like a debit card, using it to withdraw cash from an ATM. The second type of cash advance allows you
to tap into your credit line using a special type of check from your credit card company. You can use the check to pay anyone, or even
deposit money in your bank account. Now that you know how they work in general,
we can talk about the heavy fees associated with cash advances. Most credit card companies charge either a
percentage of the cash advance amount or a flat fee – whichever is higher. According to WalletHub’s Credit Card Landscape
Report, the average is 3% or $10. And on top of all that, cash advances come
with interest rates above 20%. There is no grace period, either, so the interest
starts accruing immediately. This all adds up. As a result, we strongly recommend avoiding
cash advances for three main reasons: One – They are very costly. Two – Doing a cash advance because you are
short on money can create a vicious cycle of borrowing for immediate needs that can
spiral down to payday loans, and Three – They do not look good in the eyes
of your credit card company. Taking out a cash advance makes you look like
a high-risk customer. You can learn even more about cash advances
and how to avoid them by clicking the button right here. Good luck, WalletHubbers!

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