How_Does_Cash_Advance_Work_

							How Does Cash Advance Work?

Word Count:
544

Summary:
Today, more so than ever, credit card companies are allowing cash
advances to their customers. Not all credit cards will allow this, but
many of them do. While it is tempting to use this service at times,
consumers should be very careful before taking that cash from the credit
card. Here are some issues concerning cash advances that you should know
about.

For the most part, credit card companies treat a cash advance differently
than they do a purchase. Of particular import...


Keywords:
credit cards,balance transfers,cash back,advice,purchases,news,credit
cards uk,visa,mastercard


Article Body:
Today, more so than ever, credit card companies are allowing cash
advances to their customers. Not all credit cards will allow this, but
many of them do. While it is tempting to use this service at times,
consumers should be very careful before taking that cash from the credit
card. Here are some issues concerning cash advances that you should know
about.

For the most part, credit card companies treat a cash advance differently
than they do a purchase. Of particular importance to consumers is the
interest rate that the company may charge for the advance. You should
carefully check to see how much more interest you will be charged for the
cash advance as compared to the purchase interest rate. In many
instances, the interest rate for the cash advance will be much higher
than the purchase rate. Do not assume that the purchase rate will apply
to the cash advance. Check on this before you take the money.

Most (but not all) credit card companies will allow you to get the cash
advance from an ATM machine. Other companies, however, may send you
checks in the mail. You can learn how the company handles this by reading
the billing information that you get from them. You should check to see
if there will be any additional charges should you use an ATM.

Your credit card company may also impose a cash advance fee when you take
cash. The fee is in addition to the finance charges and may be in
addition to any ATM fees that are levied.

Almost all credit companies have a cash advance limit. Some companies
limit cash advance amounts to a specific dollar amount, while some limit
the amount to a percentage of the credit limit that you have with them.
When a specific amount is stated it may say: $300 per advance or it may
be worded as $300 per week. While this limits your cash advance amount it
also limits the amount of cash a thief could charge to your account
should your card be stolen or your information compromised.

Restrictions can be an issue as well. Some companies will not allow
electronic transfer of cash advances to certain accounts. An example of
this might be an online gambling site.

Understanding how cash advance payments will be applied to your account
should be on the top of the list for anyone who is using or planning to
use the cash advances companies offer. Here is why.

Some credit card companies (indeed, most of them) will treat your cash
advance as a separate entity. This means that payments that you send in
may first be applied to your regular purchases account and whatever is
left over (if anything is left over) will be applied to the higher rate
cash advance portion of your bill. In other words, if you make only the
minimum payment per month, your cash advance balance may not go down at
all, and will, in fact, go up because of the interest that is being
charged.

Your credit card company must tell you how it treats payments when a cash
advance is involved. You should read this information carefully, and if
the system they use makes you uncomfortable, then avoid using the cash
advance services.