Credit Card Cash Advances
Mar 1st, 2007 by Wealth Builder [This post is written and copyrighted by Wealth Building Lessons (http://www.wealthbuildinglessons.com).]
A lot of people get checks in the mail from their credit card companies. They often advertise 0% APR or some low teaser rate. What many people don’t realize is that the fine print is where the credit card companies get you.
Usually, they will charge a cash advance fee of 3 to 5% depending on your credit history. Plus the low APR is only for a certain time period, often 6 months. During that time you’re often required to make at least 1 or 2 purchases on your credit card, failing which you’re now in default. In default, your interest jumps to anywhere from 19% to 29.99%! If your payment is late or you forget you’re again in default. On top of that they charge a late fee which is usually around $35. On top of that, the purchases that you make get charged at a higher rate of interest, usually at least 14-16% and they don’t get paid off until the balance of the cash advance has been paid off. These can work out to some pretty hefty fees in just a short 6 months.
So unless you’re sure you can pay of the balance within the promotional time period, or you’re one of those expert cash-advance-arbitrage experts, you should definitely think twice before taking “advantage” of them.
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2 Responses to “Credit Card Cash Advances”
yeah, i got taken in by those once and ended up paying a ton of fees. I just throw them away now.
I had an AT&T universal card. Apparently their 0% for life meant 0% for their life. As soon as they got bought by MBNA (or was it Chase?) it went up to 16%! They totally screwed me over with their late fees too.