What is Cash Advance?

Today, we are going to go into the world of finance and talk about one of its aspects that can be of great help to us or can negatively affect our finances.It is called the cash advance.

It is in your credit card account that cash advance shall be applied. In the world of plastic or credit cards, it is an option that credit cardholders can take to borrow actually money against their current balances. It is easy to avail of cash advance if you have paid your current balances. cash advance can be a life saver if your basement is flooded and the salary is only coming next week The money that you are advancing is not yours but you are just borrowing it from the credit card institution.

Before you have a cash advance, it is better to understand that the cash you can truly borrow should be compared to your actual or overall credit limit. Check on your bank statements to have a better understanding on the cash advance limit and the credit limit.

You just go to the closest ATM machine to avail of your cash advance. This is because most of the electronic banking machines out there offer the credit card user an option for cash advance.As long as the amount being withdrawn does not exceed the cash advance limit, the ATM will dispense money right away. However, sometimes even if it exceeds the cash advance limit some ATM does still dispense money but the transaction will be flagged electronically.The transaction you did will be considered an unauthorized cash advance and will be handled in the same manner as an over the limit credit purchase.

Cash advance works best in emergency cases such as when you are out of cash in the middle of a tooth work or paying some grocery store items. This will help you a lot. As of now, credit and debit cards have replaced cash transactions; there are still vendors or services that still require cash payments.

You have more expenses if you opt to have cash advances. It is because the interest on it is quite high compared to normal lending options. It is not easy to cash out money. You must use the money for a purpose. Your debt can go as high as 23% if you will not be paying on time. Cash advance should be taken into consideration properly. This will also do no good to you. Cash advances cannot do good to some people.

Borrow as much money for as long as you are able to compensate it on time. Cash advance need to be paid on time to avoid high interest rates in the long term. Cash advance is like a double edge sword, it can help you and hurt you atur debt can go as high as 23% if you will not be paying on time. the same time because it cuts both ways.