A cash advance is a kind of loan that can be extended by your employer or your credit card company. Through your employer, the process is simple. You will fill out a cash advance form and submit it to the finance department for processing. Other companies also provide a paperless transaction through submitting online forms. Through a credit card company, the card holder is given the chance to loan the available balance on the card. The amount of money available for borrowing is dependent on the agreement when the card was applied for. So if you plan to get a cash advance loan in the future, study the terms for your loan options.
So how does it work with your credit card? We are well aware that you are given a credit limit once you receive your credit card. Along with that, you will also be given a cash advance limit either equal to the credit limit or lower than it. You will be issued an ATM card which you can use for your cash advance. This can also be done via the bank teller. In other cases, checks are provided for use in establishments where credit cards are not accepted. When using the ATM, just make sure that you are withdrawing an amount that is not more than your cash advance limit. If you do that, you will conveniently get the cash you need. There may be some problems if you exceed your cash advance limit. Nevertheless, these can be solved but with an additional fee.
A cash advance is very helpful especially when you are in an establishment where only cash and checks are allowed as payment. If you apply for a personal loan, you may incur huge interest rates. It would be much easier for you to pay for something, especially during an emergency, using a cash advance that is linked to your credit card.
Just like any other loan, you should be wise in opting to use a cash advance. Getting this kind of option to get money immediately can be costly. There are other fees that go with cash advances aside from the interest rates. The money loaned including the fees and interests will be added to the total balance on the credit card. This means that this will appear in your credit card bill. As compared to credit card purchases, interests on cash advances accrue immediately. Another fee that is charged is that from the ATM when you withdraw.
Now that you know the pros and cons of getting a cash advance loan, it is up to you to decide whether to get one or not. If you do decide to apply for one, you must look for a lending company that you can truly trust. There are so many companies to choose from so you have to do your homework and research on reviews and feedback on the potential companies for your loan. Lastly, you have to pay for your loans responsibly. This way, you can maintain a good credit score and easily get other loans in the future.