One solution to this problem might be the cash advance credit card. This type of credit card is designed specifically to help people who need cash quickly. While it may be a good option, it is important to understand the terms and conditions before signing up for one. Here are a few things to know about a cash advance credit card.
How it Works
Cash advance credit cards generally let you take out cash right away. The amount that you are allowed to take out can vary. If you're not sure how much it is, call the credit card company to find out. It may be as much as a few thousand dollars, or a much lower amount, depending on your credit history and score.
Once you know what the limit is, you can go to an ATM and use the card. Enter the amount of cash that you want, without going over the limit, and you will receive it right away. You are then ready to start using the cash.
The Fees Involved
While the ability to have cash instantly is quite appealing, it is also important to know that these cards usually charge a withdrawal fee for the cash advance. So you will have the money you need, but you will also have a fee to pay. In addition, if you withdraw cash from an ATM machine, the machine may charge you an extra fee.
Also, a cash advance credit card usually charges a higher interest rate on the amount you borrow as cash. The interest rate applies to the amount right away - you are not given a grace period. The interest rate could be as high as 20 percent or more. Before you take out any cash, you'll want to know how you plan to pay it back and make it work for you.
When to use it
There is no exact formula on how to use a cash advance credit card, but you will want to keep a few things in mind before making use of it. First, you'll want to know exactly what you plan to use the cash for. You'll also want to have a plan set up to pay the amount back as fast as possible. Instead of using it for impulse purchases, take some time to consider if taking out cash is the best solution to your situation.
The biggest warnings about cash advance credit cards usually have to do with the fees involved. It is true that there are higher fees involved with this type of transaction, and that the interest rate will be higher than most cards. If you need cash quickly, however, this still might be a solid option. As long as you work to pay off the amount you borrowed quickly, you will avoid lingering debts.