Why You Should Avoid Cash Advances
March 1, 2019
At first glance, it sure seems that cash advances sound great – even the name suggests as much. You get cash in advance! It can’t get any better than that.
Cash advances are pretty much that, but as the case is with many things in life that sound too good to be true – they come with strings attached.
What are Cash Advances?
You need to know about cash advances and why you should avoid them.
First of all, a cash advance is through a credit card company, nothing else. It’s a short term loan that’s taken out against your credit. If some lender is offering a ‘cash advance,’ you can be sure that those are something far worse than routine advances.
When you get a proper cash advance, your credit card is used to take out a cash loan. That’s precisely why a cash advance can come in many forms and why people confuse them with other types of loans.
Whatever the case is, a cash advance is terrible for you, so let’s see why.
Reasons Why You Should Avoid Cash Advances
A fee is usually included with cash advances
Why would you want to get a loan that often has a significant cost in addition to other stipulations? The charges on cash advances usually display as percentages which can range from 1 to 3%. It might sound small, but with a thousand dollar advance, your fee can be more than a hundred. Then you also have interest.
Enormous interest rates
Fees might seem low, but when you combine them with interest rates – cash advances become a whole different thing. Here your interest rates can go as high as 30%! Now that’s more than too much and can quickly get you into debt.
Zero grace period
With purchase transactions on your credit card, you can usually get a 21 day grace period. However, with cash advances, you get no such thing, and the interest starts to compile straight away. Before long, you realize that you have to pay a lot more than you got in the beginning. With significant interest rates that we mentioned, we’re sure that you can appreciate how detrimental this option can be.
Cash only is a thing of the past.
If you have a credit card, you will do much better to charge the purchase instead of getting a cash advance to pay for it. Cash only is becoming a thing of the past, so there’s no reason to cling to it.
If Not Cash Advances – What Else Is There?
Cash advances are a thing of the past, and lenders who get you into debt are to be avoided. However, when you still need quick and easy loans, you should always opt for a quick in-store or online loan.
We at Illinois Lending offer these, and we provide them with very favorable terms and make them easy to repay as customer satisfaction is our number one priority. Apply for one now!