Please enable JavaScript to view the comments powered by Disqus.
advice

Are Cash Advances Worth It?

Are Cash Advances Worth It?

Editorial Disclosure: Editorial content, including card comparisons and card reviews are not provided or commissioned by the credit card issuer. Opinions expressed here are the author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Creditcards.org may be compensated through Affiliate Programs for referrals.

• Updated: July 13, 2018



Cash advances might seem like a great idea when you need money right now, but their true price won't hit home until after your visit to the ATM. Let's take a look at what to expect once the dollar bills start flowing. Related: How To Avoid Credit Card Fees

The Benefits

Credit card cash advances are fast and simple. When you're in a real pinch (like being stuck in a foreign country with no cash on hand) refilling your wallet is as simple as visiting an ATM. Cash Advances are very easy to obtain using a credit card. Just like withdrawing money from your bank account, right?

Wrong.

Read The Fine Print

Before you withdraw money from your credit card, read your card's terms and conditions. With most cards, expect to pay a typical ATM fees plus a service fee for getting a cash advance. These service fees can run as high as 5% of the amount withdrawn, so you're paying money just to use your own money.

5% of a thousand bucks is pocket change, right? Especially when you have a real crisis on your hands. But that 5% pales in comparison to the interest your credit card company tacks on to cash advances.Rates vary wildly (a select few cards don't even charge interest), but generally tend to be even higher than your card's interest rate. The worst part is that cash advance interest compounds the day of your withdrawal. You literally have no way to avoid paying the interest, that's why it's called a fee. Keep Reading: 5 Most Important Things To Look For In A Credit Card

So what's your total bill going to look like when all is said and done?

On a $1000 cash advance, you're facing perhaps a $50 service fee and possibly hundreds of dollars in day-one interest. Ask yourself, is it really worth it? Before you run to the ATM with your credit card, make sure you consider how much it will cost you in the long run. 

The better option is to use your credit card and refrain from pulling out cash. In this day and age there are plenty of establishments who take plastic. If you encounter someone who only takes cash, we suggest finding a different place to spend your hard earned money! 

 

Creditcards.org is a credit card comparison site. We have been providing our customers with the best credit card offers available since 2010. If you are looking for a new credit card, visit us here

We think you'll also enjoy
Cell phone and credit card
Five Tips to Increase the Security of Mobile App Payments
Credit
Credit Card Pre-Qualification Vs. Pre-Approval
Student loan debt
The Do's and Don'ts of Eliminating Your Student Loan Debt

SIGN UP FOR OUR NEWSLETTER

We want to hear from you and encourage a lively discussion among our users. Please help our site stay clean and safe by following our posting guidelines, and avoid disclosing any personal information such as phone numbers or bank account information.

The comments posted below are not provided, reviewed or approved by the card issuers or advertisers. Additionally the card issuer does not assume responsibility to ensure that all posts and/or questions are answered.