Typically, credit cards come with a feature called cash advance. You may consider taking advantage of this feature when you wish to get cash from your credit card, but it is important to note that this feature is one of the most expensive transactions you can get involved with.

What is a cash advance?

A cash advance on credit card refers to an amount of cash that you borrow against your credit limit. It is quite similar to using your debit card to get money from the ATM, the only difference is that this money comes from your credit limit. This translate to mean you would have to pay it back with interest. There are two possible ways you can take a cash advance of your credit card. Firstly is the use of PIN at the ATM or through the use of a convenience check which was sent to you by your credit card issuer.

A credit card cash advance is very different from a payday cash advance loan which is typically gotten from a payday loan lender. While payday cash advance don’t necessitate a credit check and is usually expected to be paid back to the payday lender by the next payday, credit card advance is tied to your credit card, which invariably means there has to be a credit check. Aside from this, credit card advance comes with the option to pay over a long period of time, as long as you are making minimum payments.

Popular lenders across Kentucky

Things to consider when taking a credit card advance in Kentucky

Although small business credit cards are used mainly for making purchases, they can equally be used to perform cash advances. It is common for many people to equate credit card cash advance to withdrawing money from ATM. Although these two have similarities, they are potentially very costly differences between them. Below are eight very essential things that you must know about credit card cash advance in Kentucky before you go ahead to take one;

1.            They have higher interest rates:

As compared to purchases, Kentucky loans online and balance transfers, a majority of small business credit card have higher interest rate for cash advances. The reason for this higher interest rate is the potential risk of default associated with customers who are often desperate for cash.

2.            Costly cash advance fees:

Aside from the high-interest rate associated with credit card cash advances, card issuers are likely to impose high transaction fees. In a lot of instances, small business credit card charges as much as 5% to 15%.

3.            It doesn’t come with a grace period:

One of the smartest ways by which you can utilize credit cards is to ensure that you stay away from interest charges. This can be achieved by ensuring that you pay your monthly statement balances completely. One of the major downsides to cash advance in Kentucky is that it doesn’t offer grace period features. Immediately you take a cash advance in Kentucky, you begin to incur interest charge on that amount from that first day until you pay the balance off completely.

4.            You may incur foreign transaction fees:

One of the reasons card holders take cash advance is because they are in a foreign land and they have run out of cash and they have no access to Kentucky loans online. Just like when you make purchases outside the United States and you are required to pay a foreign transaction fee, similarly when you take foreign cash advances you are also subjected to a foreign transaction fee, usually around 3%.

5.            ATM fees:

In addition to the foreign transaction fees, cash advance fees, high-interest rate and the no grace period, credit card advances may still incur ATM charges which is charged by the owner of the machine. This doesn’t happen with Kentucky loans online. In total, this makes three different charges that may be charged to one single transaction.

6.            Set ATM Pin:

Since most credit card cash advances happen at ATMs, it is expected that you input a PIN before your transaction is regarded as complete or approved. But compared to a new ATM card where you receive a new PIN in your mail by default as you receive the new card when it comes to cash advance in Kentucky, you will need to get in touch with your card issuer to set the PIN. When you don’t create a PIN, you create an excellent way to prevent accidental withdrawal

7.            Set account cash advance limit:

Aside from the use of ATM to set limits on your withdrawals, another very effective method to limit the costs of credit card cash advance in Kentucky is to set limits on the account. In order to achieve this, you would need to contact the card issuer and specify to them the maximum dollar amount that can be approved. Some people even go the extent of setting their card cash advance maximum to $0.

8.            Alternatives to credit card cash advances:

There are several possible alternatives to using your credit card to access cash advances. One of the easiest is the use of debit or prepaid card which has ATM access and the use of Kentucky loans online. If you find yourself in a situation where you have to pay a company or individual that don’t take credit cards, then you can consider using any of the several electronic payment alternatives that accept these cards. Although the system will likely charge you a transaction fee of 3%, this is still a far cry as compared to the many fees that make up credit card cash advances.