First Cash Advance: Think Before you Decide
Every now and then, we end up thinking that paying for our personal expenses using credit card is not good at all. But imagine a situation where you do not have enough cash in your bank account to cover all your expenses? And the best way to do is to apply for a cash advance, it is another alternative to acquire cash easily. Cash advance does not require that borrower’s bank account should have available money and on the other hand it is easier to get – sounds convenient, isn’t?
What is Cash Advance?
Cash advance is all over the place. Throughout the years, money turned out to be increasingly available. Cash advances are an instant loan and the borrowers can take their loans through cash basis and it is now accessible and highly popular. And it is a credit offered through the borrower credit card. Borrower can also get online loan using cash advance. That is why, a lot of financial companies have grown to take advantage of the demand, even if it is an alternative, lenders, fintechs or credit card corporations, most even consider a 100 day loan an option to have consumers helped through them.
On the other hand, borrowers should always remember that credit card firms won’t let them get the whole money since they are releasing loans through cash basis, they maximize the amount of money they are releasing. For many people, cash advance is covered at a limited hundred dollars. Meaning, people cannot rely on their credit card, especially when an emergency occurs.
First timer borrowers, feels little uneasy if they are applying for their first cash advance. Since they don’t know what to anticipate and make them scared. The expectation of acquiring the cash you need seems enticing. The idea of easy cash loans makes people to apply for their first cash advance. However, before approving to anything the borrowers should identify how cash advance works.
How financial firm’s process cash advance?
Processing cash advance is somewhat simple. Since the application procedure usually lasts for less than twenty minutes. Most companies who offers cash advance do not examine and check your whole personal details. And normally, they will approve your application very fast. The borrower should write the company about their post-dated cheque regarding the amount of money they borrow and other fees. The company will release the money and save the cheque while waiting for the date indicated. Typically, the borrowed money will be deposited on the borrowers account in 24 hours.
Why is Getting Cash Advance expensive?
As what stated a while ago, processing cash advance is very easy and unfortunately, it is one of the most expensive ways in getting instant cash loans. Yes, cash advance are tempting, but always remember that the costs associated are high. Because this type of loan has wide variety of expenses and fees that other ATM withdrawal does not.
Every time you get cash advance you are going to hit with the cash advance charge. This charge normally costs two to five percent of your cash advance. Meaning if you have a total cash advance of $400 with 5 percent cash advance charge, then you will have to pay $20 to acquire the cash.
On the other hand, there are still credit cards that do not charge nominal or cash advance charge. However, the priciest part of acquiring cash advances are the interest you need to pay and can be expensive in two methods.
- The cash advance interest is normally much higher compared to the regular credit card interest rate.
- The cash advance interest was start building as long as they already gave the money to you. That is why, in order to reduce the interest rate, the borrower must pay the borrowed money immediately.
Use cash advance responsibly and carefully
When you need cash, especially for emergency purposes, you will think that borrowing money from lenders is the best solution. On the other hand, it was mentioned a while ago that borrowing money (cash advance) is very expensive. However, you can still limit the bad effects by following these guidelines.
- Minimize cash advance and you must know the APR and fees.
- Get cash advance when needed – don’t get advance for your luxury.
- Pay your cash advance as soon as possible.
- Do not make cash advance a routine. Instead, start saving money so that you will have a saving when an emergency happens again.
- Do not acquire cash advance especially, if your credit card has an existing balance.
Other options to consider aside from cash advance
Cash advance must only be acquire when extreme emergencies happened and if you discover that you depend on them. Then it is the right time for you to do some changes. On the other hand, if you don’t want to get cash advance but you are experiencing money crisis then consider the following options below.
- Apply a loan (personal) from an online lender, credit union, and bank. Although, this option will be costly if your savings are not great. However, the terms and interest rate is more favorable compared to cash advance.
- Borrow money from friends or family members. Borrowing money form relatives might be a little uncomfortable, but your funds will be valuable and you don’t have to pay for high interest rates.
- Draw money from your account. As an alternative in getting cash advance, consider checking your account using your own debit card. However, you will have to face an unreasonable, but you don’t have any interest.
Cash Advance is for:
Normally, cash advance is offered for credit card holders and for small businesses. In addition, employees also offered cash advance to their employees. But the employee’s cash advance is being paid by deducting their payment on their next pay day.
Getting cash advance through credit cards means acquiring a very costly instant loan. On the other hand, cash advance is not a worthy idea at all. That is why thinking about another option aside from cash advance is a must. It is also important that borrower should think that cash advance is an indication that they need to become more responsible and careful on their savings.