How Credit Card Cash Advance Works
Getting cash advance using your credit card is very convenient when you are in dire need of cash. If you have never done it before then you may be asking how credit card cash advance works; knowing how this could help you get out of an emergency situation when you need to use cash for purchase or to pay bills.
How Credit Card Cash Advance Works
Cash advance using your credit card is simple; you can get cash advances through the allowable credit you have on the card. Therefore, for your cash advance request to be processed, you need to have adequate credit remaining on the card plus any outstanding bills should be settled. There is a fee for this transaction and there is a maximum cash advance limit.
Credit card cash advance versus purchase
A cash advance may be similar to a purchase in the sense that you are using the balance or the credit you have on your credit card. But purchases are covered by a much lower interest rate and there are no transaction fees; these are usually the reasons why users prefer to use their credit card for purchase rather than for cash advances.
Credit card cash advance versus balance transfer
A cash advance is different from a balance transfer. In a cash advance, you receive cash amount from the balance that you have on your card while a balance transfer is the transfer of the remaining balance of a card to another credit card. This is usually done by credit card owners to move their debts to a card that has a lower interest rate. Balance transfers are similar to a cash advance in some ways too; there is a charge for both transactions and these may be done through over-the- counter or by phone.
Credit card cash advance versus personal loan
A personal loan is another bank service just like a credit card cash advance. There is paperwork, credit bureau approvals and other personal requirements needed to process a personal loan while a credit card cash advance is a feature included in most credit cards. A credit card user may or may not avail of this feature and if he chooses to do so, he will just need to fill out a cash advance form from a bank or process the transaction through an ATM. A personal loan takes time while a cash advance could only take minutes to complete.