Purchasing things using a credit card is possibly one of the most convenient ways to shop. You can purchase different items like the latest electronic gadgets, clothes, jewelry or books online and even in an actual store. Credit cards have different features like credit card rewards, cash rebates, shopping points and miles. But probably one of the most overlooked features of most credit cards is the cash advance feature. A cash advance credit card is a credit card that allows card owners to purchase items on credit for as long as he has remaining credit on the card. He must also make payments on his credit card bills as well.
Cash advance credit card meaning
A cash advance credit card is basically what it is. It allows credit card holders to receive cash as long as he has corresponding credit on his account. Cash advances come with a price; a special interest rate is applied on the cash advance as well as a handling or service fee. All these fees will be stated on the credit card statement which will be received by the credit card owner in the succeeding month.
It is easy to secure credit card cash advance. The most recommended way to process a cash advance is to simply do it over the counter. Credit cards are affiliated to a local bank; fill out a cash advance form and present this form along with your credit card. The bank teller will process your cash advance, check if you qualify for the cash advance and then hand the cash that you wish to borrow once you have been approved. Cash advances using a credit card are also subject to bank terms and credit card companies set a limit for cash advances. You may check these out by calling your credit card customer service representative.
Another way to secure cash advances is to do it via an ATM. Simply choose from the available menu options on the ATM and then input your credit card PIN. And just like processing cash advance through a bank, you will also be charged a fee. There is also a certain limit per transaction and usually credit card transactions are more limited than bank transactions and the processing fee is higher. You may also check this information by calling your credit card customer service representative.
Advantages of using a credit card cash advance
- A cash advance credit card will allow credit card owners to secure cash to pay for items and bills that are not covered via credit card payment. It is a given that not all stores and establishments accept credit cards and therefore a cash advance will allow you to still buy or order items.
- Cash advances are ideal for having handy cash to carry around. Think of your credit card as a handy wallet; you can travel or go on a vacation simply bringing your credit card along. You can pay in establishments that accept credit cards and obtain cash advance via an ATM to pay for other purchases.
- Emergencies come the least time you expect it and you may use cash advance to pay for any emergency payments. These could be medical emergencies, home repairs, car repairs and so many more.
- Cash is still the most accepted way to pay especially in establishments that do not accept your credit card. Credit card brands are often displayed on the entrance of any establishment that accept credit. Simply process your cash advance via the ATM or over the counter in a bank and then make your purchase.
- Paying for all your cash advances and regular credit card purchases that you have made using your cash advance credit card will help you improve your credit standing. A high credit score improves your chances to qualify for larger loans like a housing loan, car loan or personal loans. Credit card companies report to credit bureaus (Experian, Equifax and TransUnion); paying your credit card bills on time will certainly help improve your score and your financial background in the long run.
It is very easy to use a cash advance credit card feature on your credit card but there are also disadvantages too. For one, the high fees could mean that you would be paying so much for cash advances compared to simply using your credit card. If you are not able to pay for your bills on time your total balance will be charged with a late payment fee. Experts say that although this feature is very convenient, cash advances should only be used in dire emergencies only. As a card holder you must never overlook learning your credit card terms and conditions and to refer to customer service for any questions that you may have in using your credit card.