Cash Advances on Credit Cards
Author: MrCarrot
Posted: Sun Feb 01, 2004 3:32 am
Post subject: Cash Advances
I have some questions regarding cash advance.
1) How does a cash advance work in terms of affecting "current credit limit" or whatever its called. Lets do an example: I got 3k credit limit. Then I take out 1k on cash advance. That would automatiically knock my available credit to 2k (obviously right?). Now say the cash advance interest is 20%, so it would be $200. The question is - would the availalable credit get knocked down another $200 for the interest to a total of $1800 or it would only get knocked down to 2k?
2) Are there some ways to take out cash without paying the high cash advance interest rates?
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Author: Guest
Posted: Sun Feb 01, 2004 4:54 am
Post subject:
The cash advance fee is applied immediately, so you're right $1000 + fee would be charged to you account as soon as you made the advance.
Then it gets worse. They start charging interest immediately on the cash advance -- no grace period. The CA is often at a higher interest rate than normal purchases. Any payments you make go to the lower interest part of your balance first so the CA is usually paid last.
Ouch!
I don't know how to avoid the fees or high rates other than just not doing cash advances. Some cards may have better deals than others, though. The 20% in your example seems like very high rate for the fee.
Author: NightStar
Posted: Sun Feb 01, 2004 11:05 am
Post subject: Cash Advances on Credit Cards
Recommended is to get a balance transfer made out to you for cash... sometimes the creditor card companies when first opening an account will send you balance transfer checks. Call them up and see if they have such an offer for balance transferring funds to yourself, not all do. But at least you may be a fee, but the interest rate will be lower.
Aboved mentioned is not to be confused with the cash advance checks either, have to look close at the fine print as to what exactly they have sent you.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Guest
Posted: Sun Feb 01, 2004 7:03 pm
Post subject: Cash Advances on Credit Cards
so available credit would drop to $1800 in my example?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Sun Feb 01, 2004 11:15 pm
Post subject: Cash Advances on Credit Cards
Many cards have a credit limit and a cash advance limit. These are NOT two separate amounts; the cash advance limit is part of your total credit limit. For instance, you may have a $5,000.00 credit limit, but only a $2,000.00 cash advance limit. Let's say your purchase balance was $3,500.00. In this case your cash advance limit would be reduced to $1,500.00, because that would be all you had left of your total credit limit. However, it's never a good idea to borrow to the limit. Finance charges will immediately put you over limit and would subject you to over-limit charges.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Sun Feb 01, 2004 3:32 am
Post subject: Cash Advances
I have some questions regarding cash advance.
1) How does a cash advance work in terms of affecting "current credit limit" or whatever its called. Lets do an example: I got 3k credit limit. Then I take out 1k on cash advance. That would automatiically knock my available credit to 2k (obviously right?). Now say the cash advance interest is 20%, so it would be $200. The question is - would the availalable credit get knocked down another $200 for the interest to a total of $1800 or it would only get knocked down to 2k?
2) Are there some ways to take out cash without paying the high cash advance interest rates?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Guest
Posted: Sun Feb 01, 2004 4:54 am
Post subject:
The cash advance fee is applied immediately, so you're right $1000 + fee would be charged to you account as soon as you made the advance.
Then it gets worse. They start charging interest immediately on the cash advance -- no grace period. The CA is often at a higher interest rate than normal purchases. Any payments you make go to the lower interest part of your balance first so the CA is usually paid last.
Ouch!
I don't know how to avoid the fees or high rates other than just not doing cash advances. Some cards may have better deals than others, though. The 20% in your example seems like very high rate for the fee.
Author: NightStar
Posted: Sun Feb 01, 2004 11:05 am
Post subject: Cash Advances on Credit Cards
Recommended is to get a balance transfer made out to you for cash... sometimes the creditor card companies when first opening an account will send you balance transfer checks. Call them up and see if they have such an offer for balance transferring funds to yourself, not all do. But at least you may be a fee, but the interest rate will be lower.
Aboved mentioned is not to be confused with the cash advance checks either, have to look close at the fine print as to what exactly they have sent you.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Guest
Posted: Sun Feb 01, 2004 7:03 pm
Post subject: Cash Advances on Credit Cards
so available credit would drop to $1800 in my example?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: Ira
Posted: Sun Feb 01, 2004 11:15 pm
Post subject: Cash Advances on Credit Cards
Many cards have a credit limit and a cash advance limit. These are NOT two separate amounts; the cash advance limit is part of your total credit limit. For instance, you may have a $5,000.00 credit limit, but only a $2,000.00 cash advance limit. Let's say your purchase balance was $3,500.00. In this case your cash advance limit would be reduced to $1,500.00, because that would be all you had left of your total credit limit. However, it's never a good idea to borrow to the limit. Finance charges will immediately put you over limit and would subject you to over-limit charges.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 9:11 PM
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