Almost All Credit Companies Have A Cash Advance Limit

Category: Finance.

Today, more so than ever, credit card companies are allowing cash advances to their customers.

While it is tempting to use this service at times, consumers should be very careful before taking that cash from the credit card. Not all credit cards will allow this, but many of them do. Here are some issues concerning cash advances that you should know about. Of particular importance to consumers is the interest rate that the company may charge for the advance. For the most part, credit card companies treat a cash advance differently than they do a purchase. 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.

Do not assume that the purchase rate will apply to the cash advance. In many instances, the interest rate for the cash advance will be much higher than the purchase rate. Check on this before you take the money. Other companies, may send you, however checks in the mail. Most( but not all) credit card companies will allow you to get the cash advance from an ATM machine. You can learn how the company handles this by reading the billing information that you get from them. Your credit card company may also impose a cash advance fee when you take cash.

You should check to see if there will be any additional charges should you use an ATM. The fee is in addition to the finance charges and may be in addition to any ATM fees that are levied. 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. Almost all credit companies have a cash advance limit. When a specific amount is stated it may say: $300 per advance or it may be worded as$ 300 per week. Restrictions can be an issue as well. 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.

Some companies will not allow electronic transfer of cash advances to certain accounts. 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. An example of this might be an online gambling site. Here is why. 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. Some credit card companies( indeed, most of them) will treat your cash advance as a separate entity.

In other words, if you make only the minimum payment per month, your cash advance balance may not go down at all, in fact, and will, go up because of the interest that is being charged. You should read this information carefully, and if the system they use makes you uncomfortable, then avoid using the cash advance services. Your credit card company must tell you how it treats payments when a cash advance is involved.