Did you know that 56% of Americans can’t cover a $1000 expense with their emergency savings?
If you’re ever in need of cash but are just a little short, a credit card advance could be your lifesaver. A credit card advance can provide you with some extra cash when you need it most.
If you are wondering what a cash advance is, read this short and simple guide.
What Is a Cash Advance?
A cash advance is a loan that you get against your credit card balance.
You might need cash if you have a medical emergency or car repair you can’t afford with your current funds. You may also choose to get a cash advance if you’re unexpectedly laid off from work or are struggling with unexpected bills.
This small loan amount can help you get through these tough times without having to miss payments on other bills.
What Are the Benefits of a Cash Advance?
The major benefit of getting cash from your credit card is convenience. You don’t have to wait until payday or take out another loan just to cover an unexpected expense.
Cash advances are also beneficial because they don’t require any collateral. This can be helpful if you’re when you need money fast but have nothing to use as collateral for a traditional loan.
What Are the Disadvantages of a Cash Advance?
If you’re considering taking out a cash advance, here are some things to consider:
Cash advances typically come with higher interest rates than other types of credit cards. That means it’ll cost more for every dollar you borrow if you can’t pay back the entire balance within 30 days, which is typically the longest grace period for cash advances.
And if you don’t pay off the full amount before that, most issuers will automatically increase your APR and tack on late fees.
Also, unlike purchases or balance transfers, there’s no grace period on these loans. They typically must be repaid in full by your next billing cycle. If you don’t, the interest accumulates right away.
When Should I Get a Cash Advance?
There are many types of cash advance loans that can be tempting because they’re quick and easy. Just swipe your card at an ATM or bank branch and get cash right away.
But you should think carefully before you take out a cash advance. They’re expensive and can hurt your credit score, especially if you don’t pay off the balance quickly. If you have to use a cash advance, try to get one with low fees or interest rates so it doesn’t cost too much.
Credit Card Advance: One Way to Deal With Unexpected Expenses
A credit card advance is pretty much what it sounds like: a cash loan provided by your credit card company.
It’s most commonly used in times of financial distress, though there are sometimes when it can be useful if you are responsible. Be wary, however, as the interest will be added to your balance, making this a very costly short-term loan.
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