Credit card cash advance for emergencies only
You need some cash and right now, so you head to an ATM. But you don't have enough money in your checking account. So you use your credit card to get a cash advance.
Is that really the way you want to go, because you're going to pay dearly for that quick loan?
The experts at Kiplinger's Personal Finance point out that you'll be charged a fee - usually around $10 - and then a very high interest rate.
The interest rate for cash advances with the Chase Freedom Visa is 19 percent. It's 24.9 percent with the Capital One Venture Rewards Card and 25.24 percent with the Citi Diamond Preferred.
Remember this: there is no grace period for this loan. The clock starts ticking on day one. By the time you get your credit card statement, there's already interest to pay.
On a $200 cash advance loan that could be close to $13.50.
Of course, you don't have to wait for the bill to come. Repay that loan as soon as possible and you cut the interest you owe.
The bottom line: Kiplinger's says "Taking a cash advance is defensible in an emergency - but only in an emergency."
Is that really the way you want to go, because you're going to pay dearly for that quick loan?
The experts at Kiplinger's Personal Finance point out that you'll be charged a fee - usually around $10 - and then a very high interest rate.
The interest rate for cash advances with the Chase Freedom Visa is 19 percent. It's 24.9 percent with the Capital One Venture Rewards Card and 25.24 percent with the Citi Diamond Preferred.
Remember this: there is no grace period for this loan. The clock starts ticking on day one. By the time you get your credit card statement, there's already interest to pay.
On a $200 cash advance loan that could be close to $13.50.
Of course, you don't have to wait for the bill to come. Repay that loan as soon as possible and you cut the interest you owe.
The bottom line: Kiplinger's says "Taking a cash advance is defensible in an emergency - but only in an emergency."
If no one ever used a cash advance, they wouldnât exist. So when is it OK to use a cash advance? When you need cash during an emergency and there are no other options. In Janeâs case, it didnât seem like there were many options available because she didnât have her debit card and her situation forced her to use cash. Sometimes you just have to pay the toll.
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