No doubt you’ve received plenty of offers from your credit card issuer – urging you to use among the “handy checks enclosed” to fund a holiday, buy new furniture, or splurge on a new wardrobe. Sometimes they even fill in the amount on one of the checks – encouraging you to borrow an additional $1, 000, $2, 500 or even $5, 000. Sometimes these checks come with an initial low interest period, just to sweeten the offer and encourage you to take advantage of the offer. If you actually need to borrow money in those days, the offer can be a welcome comfort. (But please don’t fall for the “splurge” enticement – it will come back to bother you! ) You CAN use these credit card cash advances to help your financial situation, but only if you use them carefully.
Let’s take a take a look at the situation:
If you have a credit card balance on another card and the curiosity has suddenly increased from five. 9% to 25. 9%, after that using a cash advance check to pay off the other balance can be a wise decision. But… to begin with the fee charged for the cash loan. Then look at the term. Will the cash advance check at a low rate keep that low rate lengthy enough for you to pay off the balance, or will it revert to a high interest rate in just a few short months?
I’ve seen credit card offers charging a charge of 3% for the cash advance in 1 . 9% interest – plus switching to 19. 9% right after only 60 days!
Read the fine print – all of it.
New regulations signed into legislation this summer will require banks to keep promotional interest rates in effect for 6 months — but will even that be long enough for you to pay off the balance? And what rate of interest will you pay if you still have an outstanding balance after those 6 months?
Following, look at the interest rate you pay on purchases. Your credit card issuer may be offering you a low rate on that cash advance, but a high rate on purchases. And under current conditions, your payments will apply to the balance with all the lowest interest rate until it is paid in full – then will apply to high interest balances. Under the conditions of some cards, your entire transaction applies to the lowest rate balance and it is interest. Here is more info on 신용카드 현금화 look into the site.
Interest on the higher price balance continues to accrue, adding to that high interest rate balance every month. This will modify under the new regulations, but they is not going to take effect until next year, so be careful. If you use a card for a cash advance, you’re probably better off not really using that card for everything else.