The accidents do not come with a precaution.
The only financial support in that short time is advancing cash from credit card. This quick cash process has some dangers too. In this article, we are about to discuss about top 4 dangers about them. If you think this quick cash is a perfect solution, then the pricing is also a very high amount. It will create an effect on your typical financial activities.
If you know the upcoming financial inconveniences, then you can avoid them easily. They are described downward:
1. The First Danger: Large Sum of Money
When you are availing cash advance, the credit card companies will take their advantages thoroughly. In emergencies, you will not get enough time to go to a bank. While you are withdrawing the money from an ATM, some fees will be automatically deducted from the account. First one is the convenience fee. And you will have to pay for the ATM fees too. To make it costly, the hidden charge is also an important role in this process.
2. The Second Danger: Unimaginable Interest Rate
The credit card companies always have a doubling procedure for the credit. When you are advancing cash, the interest rate is even higher than normal. Annual Percentage Rate will make your credit amount more vulnerable. It is the same interest rate that you have to pay when you are at a shopping mall for buying products. The High APR is really considerable before Cash Advance.
3. The Third Danger: Unavailability of Grace Period
You may get a grace on your daily purchasing using a credit card. This is a normal and regular process. But the cash advance does not have the same procedure. You will have to face the lack of grace period in this type of transaction.
The increment in your balance will rise very quickly. When you will get the letter from the company, they will want you to pay the cash advance amount as a first priority.
4. The Fourth Danger: Losing of Financial Attitude
When you are advancing cash from your credit card, eventually you will stop saving money for emergencies and valiant situations. This bad habit will affect you much to gain a stability in financial habits.
From the above discussion, it is pretty much clear that saving is more preferred than owing. So, you should avoid cash advance from credit card unless it is deadly necessary.
Many people believe that it is one of the best options when it comes to getting cash, but this can represent a very high cost.
Anyone can live in a difficult economic time in which he needs to have cash fast and without having to make paperwork or ask family: from running out of money to pay the market he made in the square until that time on a trip in That there is no possibility of making transfers and still have two days to pay the salary but you need to pay your partner because he did the favor of buying a few things in the supermarket.
Among the alternatives available, you may have heard about “advances with the card” that is defined as the ability to use the credit card to obtain cash, ie not used to make purchases, but to receive money in cash. It is a way to get cash without having resources in the bank.
The way is simple: you enter an ATM, enter your card and request the option that says “advance,” enter your credit card, then estimate the amount you need and the cash will be delivered, as If it is a debit card.
Yes, it is quite simple, it has no complications, but there are important implications that you may not be so aware of. The advances generate the payment of interest, from the moment of the use of the advance quota. The interest rate is the highest in the market for this type of products. In addition, some banks charge a commission for the use of the advance quota. Therefore the use of these resources should be carefully.
There are certain conditions that you should keep in mind:
You can not withdraw the total quota of your card, that is, if your card has a quota of $ 2 million, in general, most banks leave to obtain advances of maximum 30% of the quota, in the example, would be of maximum $ 600,000. But that can vary.
Remember that the advance is borrowed money from the card, that is, a debt and, generally, the banks differ by 12 installments, charging the interest of the annual effective rate. But it can also vary, depending on the bank and its type of card.
When to do it?
If you ask a person who is smart with their money, who has no debts or who does a good management of their finances, they will tell you NEVER. Why? Because it comes very expensive and the only advisable time to do so is when it is an emergency that really needs that cash.
David Jones, president of the Association of Consumer Credit Advisory Agencies in the United States, suggests in a Credit publication that the following should be taken into account:
Do you really need cash? If it is something you can buy with your credit card for fees and installments.
Read the fine print. Before making a breakthrough know how much it will cost: the fee and the additional charge. Consider other alternatives: If you urgently need cash, consider selling some items, like garage sale, or doing overtime at your job or borrowing from a relative (although here we tell you why it does not suit you).
I already did, now what?
Before this, you have to know that the most advisable thing is to pay it completely but, unlike a purchase, which you can pay in the following month without being charged the interest, the cash advance with the credit card will charge you for Complete the interest generated (the interest rate), so it will always cost you expensive, so pay it on the bill the following month.