Credit Card Debt Relief

Tuesday, February 28, 2012

Cash Advance Interest on Credit Cards

Things You Need to Know About Cash Advance Interest Rates

As a credit card holder you are very much aware that credit card interest rates are the basis for how much you will end up paying for your debts. On the other hand, you are probably aware that balance transfer rates are different from your normal purchase interest rates and these balance transfer rates can help in saving on interests, especially if you are going to transfer your balance to a new credit card.

More about cash advance rates:

If you are going to use your credit card in order to obtain instant cash, then you will be using a cash advance feature wherein the interest rate is actually the APR or annual percentage rate. There are some cases where this rate can be as low as the purchase rate, but usually, most of the cash advance rates are higher.

The importance of knowing about cash advance rates:

There are a lot of reasons why you need to know how cash advance rates work before you are going to submit a credit card application. Here are some of the reasons:
  1. A cash advance rate applies not only to ATM withdrawals. In general, you will be charged with cash advance rates when you are going to use your credit card for paying bills and purchasing traveler’s cheques.
  2. Balance transfers might be affected by cash advance rates. Policies would usually vary from one credit card company to another. Some companies will charge you a cash advance rate if you are going to transfer your balances, those that are not paid during the introductory period (i.e. your existing credit card debt.)
  3. There are no interest free days with cash advances. The 55 interest free days that are applicable to regular purchase rates are usually not applicable to cash advance rates. This simply means that a cash advance interest rate would immediately apply as soon as you have withdrawn cash.
Typically cash advance rates are not noticed by credit card applicants. People usually look for APR rates , card fees and other bonus features and entirely forget to check the cash advance rate in the process. Before you are going to submit your application for a credit card, make sure that you carefully read the terms first.

If you are interested in using a credit card for cash advances, you should think twice. Cash advances should really only be used for emergencies.

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