The economy has been struggling for quite some time. And it does not seem that it will get better anytime soon. This means that for many households money is tight. Many families use financial budgets to control their spending. This usually works well, however, unexpected emergencies can arise at any time that may put severe financial strain on the family budget. Cars can break down, roofs can leak, pets can get sick, medical emergencies can happen. In cases like this having access to quick cash can be a real life saver. One form of obtaining a short term loan is the cash advance. So, what is a cash advance?
A cash advance is a loan of money that can be taken out via a credit card or charge card against your credit limit. It is a simple process and can give you cash in hand to get you through your immediate financial difficulties. The transaction usually includes finance fees and there could be a higher than normal interest rate. Be aware that there is usually no interest free period. The cash advance limit on a credit card is different from the regular credit limit so check this out before undertaking the cash advance.
The cash advance fee that you are charged is determined in one of two ways. It can be calculated as a percentage of the amount of your advance. So if it is 3% you pay $3 for every $100 you receive as a cash advance. The other way the cash advance fee is calculated is as a flat fee that is unchanged and is not based on the amount you borrow.
You can get a cash advance from an ATM by using your credit card. If the amount is within your cash advance limit you will get the money immediately. If you are asking for more than your limit – you may still receive the money – but likely will be treated in the same way as if you have gone over your regular credit limit.
Although we live in a society where credit and debit cards make it easy to live without cash, there are many occasions where cash is needed. If you are going to the farmers market or if you stop at a food vendor’s stall in the street you usually need cash. Therefore, it can be helpful to have access to cash – and taking a cash advance on your credit card may be a useful way to access the cash you need. However, be aware that you will be charged interest along with other finance charges and so it is in your best interest to repay the borrowed amount as quickly as you can.
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