The cash accessible using credit cards is referred to a cash advance. However, it is advisable to only choose this loan option. But only after exhausting all the other sources of cash. Some of which include withdrawal from your savings account and approaching moneylending companies for fast cash loans.
Normally, cash advances attract rather high interests and fees. These are actually charged once you get the funds. The costs are often very high that they negate any short-term gains. Gains that are obtainable from using a cash advance.
Here are guidelines that are you should know. This is as far as taking cash advance is concerned.
Things To Be Cautious About As You Take Cash Advances
You need to be cautious when making specific purchases. Some purchases are considered as cash advances by the Banks. This is even when you did not get the cash from an ATM or used convenience checks. Here are some of the purchases that are considered as cash advances:
- Foreign currency
- Cash equivalent buys on PayPal
- Gambling chips
- Lottery tickets
- Money orders / Traveler’s checks
At times making fund transfers to your PayPal account could be treated as cash advances. It only applies each time you buy certain items using Paypal. Some of the items may include gift cards and these buys are classified as “cash equivalent”.
How the funds are applied
Each time you make minimum payments using the credit card. There are funds that are applied on the acquisitions. This occurs because most card issuers put minimum payments. This often goes towards items that accumulate low paypaler rates. You cannot target items as you make your payments.
Do note that you cannot take personal loans to settle your advances before a purchase. By law, however, any payments that surpass the minimum. They have to be included in the highest balance on the APR. When you have to take some cash advance. It is advisable that the next payment include the minimum plus the advance. Even better is when you can settle the entire debt.
Where to get the info you need
Compiling the different conditions and terms of all credit cards accessible in Singapore. It could take some time. However, by following the guidelines indicated. You can read through the conditions and terms of the credit card. Then identify the details that are essential.
This will then help you understand the rules regarding the cash advances. It is important to note that the terms are updated frequently. Therefore you have to read through them again before making the cash advance.
How Cash Advances Work
It is possible for you to access cash advances through an ATM. Another way is with bank tellers or convenience checks. To be able to access cash advances from the ATM. You will need to hold a PIN. When you do not get a PIN created for your bank account. You will need to get in touch with the customer service office of the card provider.
From them, you can request them to have a PIN set for your bank account. After you receive the PIN, accessing the funds is similar to using a debit card.
Another alternative you could use the convenience checks. This is a means of taking cash advances. Often times credit card issuers send the convenience checks. Mostly accompanied with special offers for their customers. The convenience checks may be used in the same way as usual bank checks.
However, you need to be cautious when using the convenience checks. Only use the checks if they come with an offer. This could be an offer like zero % APR for 6 months.
It is also important that a borrower knows the amount accessible through the cash advance. Often the amount will depend on the card issuer. Also, your credit rating will impact the amount.
From this the higher the credit score. Then the amount you may take out will be more for the cash advance. Also, the maximum amount you may access is the credit limit less the advance fee. You need to realize that different moneylenders set different credit limits. This amount is normally a portion of your credit card limit.
The cash advance cost
For you to access cash advances. You will be required to pay upfront fees and different APR. Normally, the upfront charges are the amount greater between S$15 and 6%. On nearly all credit cards, cash advances totaling S$250 could cost you upfront costs of S$15. When the amount is withdrawn is larger, you will be charged would be 6 percent.
The entire balance on your account will be the sum of your cash advance. This is in addition to the upfront charges. This factor is very important because your advance APR will depend on it. The balance from acquisitions and your advance balance are very different.
The credit card cash advance balance usually attracts higher rates of interest. This is from the time you access the advance money. Borrowers need to recognize that cash advances do not have a grace period.
The Cash Advances From Card Provider’s Standpoint
Credit card companies and banks normally have high fees. The rates of interest on their cash advances are high too. This is because this transaction involves a high risk. The client might fail to settle the personal loan.
Every time you purchase anything using a credit card then fail to repay the debts. The credit card issuing company cannot easily acquire the bought item. Making recovery of the loss very hard. Hence, moneylenders will charge the high interests and fees.
This to help offset the cash advance and high risks related to it.
We hope that this article helps to clear any doubt and answer your questions on credit card cash advances. For an alternative financial solution, you can always look into approach legal moneylenders for a quick and fuss-free loan, catered to match your needs and work into an easy repayment plan.