Credit cards can be used to pay for everything now. However, there are times when you need actual cash to pay for certain services. If you find yourself in that kind of situation but you do not have the cash to sort yourself out, a credit card will be useful. Certain credit cards allow you to withdraw physical cash at the ATM.
Although not all cards have this feature, many of them do. You can check your credit card statement or cardholder agreement to see if it is possible to use your card at the ATM. If you see cash advance fee and cash advance APR on your cardholder agreement, you can use the car at the ATM. In the same way, if you see cash advance credit line on your card statement, there is a possibility of using the card at an ATM.
Should I Get Cash a Credit Card Cash Advance?
You should only consider a cash advance if you really need it and you have no way out of the situation. If you need cash to attend to an emergency urgently, you can consider a cash advance. you should only get a credit card cash advance if you are certain that you can pay back the loan in the next few months. However, if there are other ways of getting the cash, you should probably consider those avenues first.
How to Use Your Credit Card to Get Cash from The ATM?
- The first thing to do is to read the terms and conditions for getting a cash advance. You can find this on your cardholder agreement. You can see the fees and the APR when you read the terms and conditions. The next thing to do is to check the PIN assigned to your card. sometimes, the PIN will come with the card. It will be presented on a different form and you will need to remove the seal to check the PIN. At other times, you will need to set it yourself. You can call the credit card company for assistance. Remember to keep your PIN a secret.
- You can now visit the ATM to make your withdrawal. When you insert your card, select credit to proceed with your withdrawal.
What makes cash advance expensive?
The fees charge on cash advance are quite expensive and this makes cash advances expensive. Below are the fees charged on credit cash advances.
The cash advance fee is the fee imposed by the card issuer. Some card issuers charge a flat rate for every credit card cash advance. Some also charge a percentage for the amount you want to take. This fee will be added to the amount you withdraw.
- ATM or Bank Fees
This fee is charged by the ATM company that completed your transaction.
The interest rate is the rate charged on the cash advance. This rate varies from one lender to the other. This interest rate is much higher compared to the interest charged on purchases. With cash advances, there is no grace period. The interest starts accumulating on the day you draw the cash.
Alternatives to Credit Card Cash Advance
Before you decide to take a credit card cash advance, you should look at other options. If after exploring this options, you still think you should go in for the credit card cash advance, you can opt for it. Check out the available options.
- Personal loans
A personal loan can sort you out if you have a good credit score. People with bad credit can also access personal loans but the interest rate on the loan will be high. In such a situation, you should check if the rate on the personal loan is less expensive compared to the cash advance, then you can get the personal loan. Rates on personal loans vary. They depend on your credit score. If you have a good credit score, you can access a personal loan at a low rate. There are secured and unsecured personal loan options. For people who do not have a property to back the loan, they can access unsecured loans. However, unsecured loans are more expensive since they are riskier to the lender.
- Overdraw on your checking account
You can also consider overdrawing on your checking account. With this, you will use your debit card to take cash to pay later. With this option, you will pay fees but there will be no interest rate attached.
- Payday Loans
If you need cash for a short period, you can opt for a payday loan. Payday loans are short-term loans that can be accessed in less than 2 business days. The application process is simple and most of them can be completed online. The rate on these loans also depends on your credit score. A good credit score attracts lower rates. The thing about payday loans is that they are due by the next payday. You should make plans on how to repay them since late payments attract hefty late fees.
- Title Loans
If you have a car in your name, you can access credit using the car title. With title loans, the lender can offer you cash that is equal to the worth of the car. The good thing about title loans is that you can still use your car even after using it to attain credit.
Credit card cash advances may provide great financial relief in times of financial crisis but they are not always the best option. These loans are expensive and can accumulate fast. Bear in mind that the interest begins to the accumulate right after you have accessed the funds. There are no grace periods. This means that you should plan on how to pay back the loan right after getting the funds.
Unfortunately, people become dependent on this loan option because it is easy to access. The truth is that you will get stuck in a debt cycle if you decide to depend on this credit every month. The interest keeps increasing and most of your cash will go into interest payments. If you have a genuine financial problem, you should consider getting help. You can opt for credit counseling to help you to manage your finances.
If you have more than one credit card, compare rates before going in for the cash advance. Some credit card companies even waive the fees off cash advance transactions. If you have a card that offers waives off the fees, you should use that card. This will help you to reduce the cost of the cash advance. It is, however, important to note that credit card cash advance should be the last resort. You should explore all other cheaper options first.