Don’t Give In To Temptation
Credit cards are a god send just like the new entrant Crypto Code, an automated trading system which makes entry to the trading world really simple. What makes credit cards attractive besides providing you the ability to indulge in cashless purchases is the ability to get a cash advance.
But what you must realize is that when you use your credit card for any reason you are also looking at a high-interest rate. Therefore, minimize the use of your card and more so for withdrawing cash. It is important, though, for you to know that in an emergency when you need cash and your wallet is empty your credit card can be the friend you need.
Here are a few reasons why you must resist the temptation.
- They are expensive: The way banks treat cash advance against your credit card is different from the way the usual credit card purchases are treated.
- There is a fee levied by the bank for such cash advances which are usually a percentage of the amount withdrawn. Normally banks charge between 2-5 percent on cash advances.
- If you use a bank ATM then you pay an additional fee not only to your bank; but if you use the ATM of another bank you pay additional service charges to the other bank.
- The interest rates are also higher for cash advances and hence if you delay paying the cash you accrue more interest. There is no grace period; the interest starts building up from the day of the transaction.
- You have financial issues: A onetime cash advance against your credit card is fine but if you make it a habit there is a deep underlying financial problem that must be addressed. You must plan your finances in such a way that you have the required money to cover all your essential utilities. Easy availability of cash does not mean it comes free. The chances of you falling behind in your payments are very high if you turn to credit card cash advances frequently.
Everybody has financial difficulties once in a way and it is ok to take loans and cash advances, but in the long term, it is detrimental to your finances, especially cash advance against your credit card. It is crucial that you have an emergency fund for sudden expenses. Take a look at your expenses and your income to stay afloat and not rely too much on loans of any kind no matter how attractive they look!